Correlation Between Sheng Yu and Taishin Financial
Can any of the company-specific risk be diversified away by investing in both Sheng Yu and Taishin Financial at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Sheng Yu and Taishin Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sheng Yu Steel and Taishin Financial Holding, you can compare the effects of market volatilities on Sheng Yu and Taishin Financial and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Sheng Yu with a short position of Taishin Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sheng Yu and Taishin Financial.
Diversification Opportunities for Sheng Yu and Taishin Financial
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sheng and Taishin is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Sheng Yu Steel and Taishin Financial Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taishin Financial Holding and Sheng Yu is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Sheng Yu Steel are associated (or correlated) with Taishin Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taishin Financial Holding has no effect on the direction of Sheng Yu i.e., Sheng Yu and Taishin Financial go up and down completely randomly.
Pair Corralation between Sheng Yu and Taishin Financial
Assuming the 90 days trading horizon Sheng Yu Steel is expected to under-perform the Taishin Financial. In addition to that, Sheng Yu is 4.0 times more volatile than Taishin Financial Holding. It trades about -0.17 of its total potential returns per unit of risk. Taishin Financial Holding is currently generating about -0.08 per unit of volatility. If you would invest 5,120 in Taishin Financial Holding on August 26, 2024 and sell it today you would lose (20.00) from holding Taishin Financial Holding or give up 0.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sheng Yu Steel vs. Taishin Financial Holding
Performance |
| Timeline |
| Sheng Yu Steel |
| Taishin Financial Holding |
Sheng Yu and Taishin Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sheng Yu and Taishin Financial
The main advantage of trading using opposite Sheng Yu and Taishin Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sheng Yu position performs unexpectedly, Taishin Financial can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Taishin Financial will offset losses from the drop in Taishin Financial's long position.| Sheng Yu vs. Cheng Shin Rubber | Sheng Yu vs. Taiwan Cement Corp | Sheng Yu vs. China Steel Chemical | Sheng Yu vs. Yulon Motor Co |
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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