Correlation Between First Insurance and Phoenix Silicon
Can any of the company-specific risk be diversified away by investing in both First Insurance and Phoenix Silicon 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 First Insurance and Phoenix Silicon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Insurance Co and Phoenix Silicon International, you can compare the effects of market volatilities on First Insurance and Phoenix Silicon 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 First Insurance with a short position of Phoenix Silicon. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Insurance and Phoenix Silicon.
Diversification Opportunities for First Insurance and Phoenix Silicon
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between First and Phoenix is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding First Insurance Co and Phoenix Silicon International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phoenix Silicon Inte and First Insurance 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 First Insurance Co are associated (or correlated) with Phoenix Silicon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phoenix Silicon Inte has no effect on the direction of First Insurance i.e., First Insurance and Phoenix Silicon go up and down completely randomly.
Pair Corralation between First Insurance and Phoenix Silicon
Assuming the 90 days trading horizon First Insurance is expected to generate 1.18 times less return on investment than Phoenix Silicon. But when comparing it to its historical volatility, First Insurance Co is 3.82 times less risky than Phoenix Silicon. It trades about 0.34 of its potential returns per unit of risk. Phoenix Silicon International is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 12,250 in Phoenix Silicon International on August 30, 2024 and sell it today you would earn a total of 1,000.00 from holding Phoenix Silicon International or generate 8.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
First Insurance Co vs. Phoenix Silicon International
Performance |
| Timeline |
| First Insurance |
| Phoenix Silicon Inte |
First Insurance and Phoenix Silicon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Insurance and Phoenix Silicon
The main advantage of trading using opposite First Insurance and Phoenix Silicon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Insurance position performs unexpectedly, Phoenix Silicon 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 Phoenix Silicon will offset losses from the drop in Phoenix Silicon's long position.| First Insurance vs. EnTie Commercial Bank | First Insurance vs. Union Bank of | First Insurance vs. Bank of Kaohsiung | First Insurance vs. Taiwan Business Bank |
| Phoenix Silicon vs. Taiwan Semiconductor Manufacturing | Phoenix Silicon vs. MediaTek | Phoenix Silicon vs. United Microelectronics | Phoenix Silicon vs. Novatek Microelectronics Corp |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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