Correlation Between Taiwan Business and Shin Kong
Can any of the company-specific risk be diversified away by investing in both Taiwan Business and Shin Kong 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 Taiwan Business and Shin Kong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Taiwan Business Bank and Shin Kong Financial, you can compare the effects of market volatilities on Taiwan Business and Shin Kong 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 Taiwan Business with a short position of Shin Kong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taiwan Business and Shin Kong.
Diversification Opportunities for Taiwan Business and Shin Kong
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Taiwan and Shin is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Taiwan Business Bank and Shin Kong Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shin Kong Financial and Taiwan Business 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 Taiwan Business Bank are associated (or correlated) with Shin Kong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shin Kong Financial has no effect on the direction of Taiwan Business i.e., Taiwan Business and Shin Kong go up and down completely randomly.
Pair Corralation between Taiwan Business and Shin Kong
Assuming the 90 days trading horizon Taiwan Business is expected to generate 2.71 times less return on investment than Shin Kong. In addition to that, Taiwan Business is 1.28 times more volatile than Shin Kong Financial. It trades about 0.09 of its total potential returns per unit of risk. Shin Kong Financial is currently generating about 0.32 per unit of volatility. If you would invest 1,185 in Shin Kong Financial on October 26, 2024 and sell it today you would earn a total of 45.00 from holding Shin Kong Financial or generate 3.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Taiwan Business Bank vs. Shin Kong Financial
Performance |
| Timeline |
| Taiwan Business Bank |
| Shin Kong Financial |
Taiwan Business and Shin Kong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taiwan Business and Shin Kong
The main advantage of trading using opposite Taiwan Business and Shin Kong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taiwan Business position performs unexpectedly, Shin Kong 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 Shin Kong will offset losses from the drop in Shin Kong's long position.| Taiwan Business vs. First Financial Holding | Taiwan Business vs. Chang Hwa Commercial | Taiwan Business vs. Sinopac Financial Holdings | Taiwan Business vs. Taishin Financial Holding |
| Shin Kong vs. Cathay Financial Holding | Shin Kong vs. Taishin Financial Holding | Shin Kong vs. Fubon Financial Holding | Shin Kong vs. CTBC Financial Holding |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |