Correlation Between Bank of Kaohsiung and Insyde Software
Can any of the company-specific risk be diversified away by investing in both Bank of Kaohsiung and Insyde Software 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 Bank of Kaohsiung and Insyde Software into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank of Kaohsiung and Insyde Software, you can compare the effects of market volatilities on Bank of Kaohsiung and Insyde Software 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 Bank of Kaohsiung with a short position of Insyde Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Kaohsiung and Insyde Software.
Diversification Opportunities for Bank of Kaohsiung and Insyde Software
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Bank and Insyde is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Kaohsiung and Insyde Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insyde Software and Bank of Kaohsiung 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 Bank of Kaohsiung are associated (or correlated) with Insyde Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insyde Software has no effect on the direction of Bank of Kaohsiung i.e., Bank of Kaohsiung and Insyde Software go up and down completely randomly.
Pair Corralation between Bank of Kaohsiung and Insyde Software
Assuming the 90 days trading horizon Bank of Kaohsiung is expected to under-perform the Insyde Software. But the stock apears to be less risky and, when comparing its historical volatility, Bank of Kaohsiung is 4.67 times less risky than Insyde Software. The stock trades about -0.02 of its potential returns per unit of risk. The Insyde Software is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 10,747 in Insyde Software on September 2, 2024 and sell it today you would earn a total of 36,053 from holding Insyde Software or generate 335.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of Kaohsiung vs. Insyde Software
Performance |
| Timeline |
| Bank of Kaohsiung |
| Insyde Software |
Bank of Kaohsiung and Insyde Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Kaohsiung and Insyde Software
The main advantage of trading using opposite Bank of Kaohsiung and Insyde Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Kaohsiung position performs unexpectedly, Insyde Software 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 Insyde Software will offset losses from the drop in Insyde Software's long position.| Bank of Kaohsiung vs. Central Reinsurance Corp | Bank of Kaohsiung vs. Huaku Development Co | Bank of Kaohsiung vs. Fubon Financial Holding |
| Insyde Software vs. Silicon Power Computer | Insyde Software vs. Allied Industrial | Insyde Software vs. Tai Tung Communication | Insyde Software vs. WinMate Communication INC |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |