Correlation Between ESUN Financial and Taisol Electronics
Can any of the company-specific risk be diversified away by investing in both ESUN Financial and Taisol Electronics 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 ESUN Financial and Taisol Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ESUN Financial Holding and Taisol Electronics Co, you can compare the effects of market volatilities on ESUN Financial and Taisol Electronics 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 ESUN Financial with a short position of Taisol Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of ESUN Financial and Taisol Electronics.
Diversification Opportunities for ESUN Financial and Taisol Electronics
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between ESUN and Taisol is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding ESUN Financial Holding and Taisol Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taisol Electronics and ESUN Financial 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 ESUN Financial Holding are associated (or correlated) with Taisol Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taisol Electronics has no effect on the direction of ESUN Financial i.e., ESUN Financial and Taisol Electronics go up and down completely randomly.
Pair Corralation between ESUN Financial and Taisol Electronics
Assuming the 90 days trading horizon ESUN Financial is expected to generate 3.79 times less return on investment than Taisol Electronics. But when comparing it to its historical volatility, ESUN Financial Holding is 2.51 times less risky than Taisol Electronics. It trades about 0.03 of its potential returns per unit of risk. Taisol Electronics Co is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 6,120 in Taisol Electronics Co on September 2, 2024 and sell it today you would earn a total of 1,220 from holding Taisol Electronics Co or generate 19.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ESUN Financial Holding vs. Taisol Electronics Co
Performance |
| Timeline |
| ESUN Financial Holding |
| Taisol Electronics |
ESUN Financial and Taisol Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ESUN Financial and Taisol Electronics
The main advantage of trading using opposite ESUN Financial and Taisol Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ESUN Financial position performs unexpectedly, Taisol Electronics 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 Taisol Electronics will offset losses from the drop in Taisol Electronics' long position.| ESUN Financial vs. Mega Financial Holding | ESUN Financial vs. CTBC Financial Holding | ESUN Financial vs. First Financial Holding | ESUN Financial vs. Fubon Financial Holding |
| Taisol Electronics vs. Hon Hai Precision | Taisol Electronics vs. Delta Electronics | Taisol Electronics vs. LARGAN Precision Co | Taisol Electronics vs. Yageo 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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