Correlation Between President Securities and Sinopac Financial
Can any of the company-specific risk be diversified away by investing in both President Securities and Sinopac 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 President Securities and Sinopac Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between President Securities Corp and Sinopac Financial Holdings, you can compare the effects of market volatilities on President Securities and Sinopac 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 President Securities with a short position of Sinopac Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of President Securities and Sinopac Financial.
Diversification Opportunities for President Securities and Sinopac Financial
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between President and Sinopac is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding President Securities Corp and Sinopac Financial Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinopac Financial and President Securities 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 President Securities Corp are associated (or correlated) with Sinopac Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinopac Financial has no effect on the direction of President Securities i.e., President Securities and Sinopac Financial go up and down completely randomly.
Pair Corralation between President Securities and Sinopac Financial
Assuming the 90 days trading horizon President Securities Corp is expected to generate 1.28 times more return on investment than Sinopac Financial. However, President Securities is 1.28 times more volatile than Sinopac Financial Holdings. It trades about 0.09 of its potential returns per unit of risk. Sinopac Financial Holdings is currently generating about 0.06 per unit of risk. If you would invest 1,900 in President Securities Corp on August 26, 2024 and sell it today you would earn a total of 780.00 from holding President Securities Corp or generate 41.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
President Securities Corp vs. Sinopac Financial Holdings
Performance |
| Timeline |
| President Securities Corp |
| Sinopac Financial |
President Securities and Sinopac Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with President Securities and Sinopac Financial
The main advantage of trading using opposite President Securities and Sinopac Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if President Securities position performs unexpectedly, Sinopac 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 Sinopac Financial will offset losses from the drop in Sinopac Financial's long position.| President Securities vs. Yuanta Financial Holdings | President Securities vs. IBF Financial Holdings | President Securities vs. China Development Financial | President Securities vs. Taiwan Business Bank |
| Sinopac Financial vs. First Financial Holding | Sinopac Financial vs. Taishin Financial Holding | Sinopac Financial vs. CTBC Financial Holding | Sinopac Financial vs. Mega 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 Stocks Directory module to find actively traded stocks across global markets.
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