Correlation Between Microelectronics and Taishin Financial
Can any of the company-specific risk be diversified away by investing in both Microelectronics 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 Microelectronics and Taishin Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microelectronics Technology and Taishin Financial Holding, you can compare the effects of market volatilities on Microelectronics 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 Microelectronics with a short position of Taishin Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microelectronics and Taishin Financial.
Diversification Opportunities for Microelectronics and Taishin Financial
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Microelectronics and Taishin is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Microelectronics Technology 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 Microelectronics 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 Microelectronics Technology 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 Microelectronics i.e., Microelectronics and Taishin Financial go up and down completely randomly.
Pair Corralation between Microelectronics and Taishin Financial
Assuming the 90 days trading horizon Microelectronics Technology is expected to under-perform the Taishin Financial. In addition to that, Microelectronics is 14.51 times more volatile than Taishin Financial Holding. It trades about -0.07 of its total potential returns per unit of risk. Taishin Financial Holding is currently generating about 0.48 per unit of volatility. If you would invest 4,585 in Taishin Financial Holding on October 25, 2024 and sell it today you would earn a total of 110.00 from holding Taishin Financial Holding or generate 2.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microelectronics Technology vs. Taishin Financial Holding
Performance |
| Timeline |
| Microelectronics Tec |
| Taishin Financial Holding |
Microelectronics and Taishin Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microelectronics and Taishin Financial
The main advantage of trading using opposite Microelectronics and Taishin Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microelectronics 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.| Microelectronics vs. Unimicron Technology Corp | Microelectronics vs. Kinsus Interconnect Technology | Microelectronics vs. Novatek Microelectronics Corp | Microelectronics vs. Delta Electronics |
| Taishin Financial vs. Feng Ching Metal | Taishin Financial vs. United Radiant Technology | Taishin Financial vs. Chicony Power Technology | Taishin Financial vs. Microelectronics Technology |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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