Correlation Between ESUN Financial and Topco Scientific
Can any of the company-specific risk be diversified away by investing in both ESUN Financial and Topco Scientific 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 Topco Scientific 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 Topco Scientific Co, you can compare the effects of market volatilities on ESUN Financial and Topco Scientific 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 Topco Scientific. Check out your portfolio center. Please also check ongoing floating volatility patterns of ESUN Financial and Topco Scientific.
Diversification Opportunities for ESUN Financial and Topco Scientific
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ESUN and Topco is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding ESUN Financial Holding and Topco Scientific Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Topco Scientific 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 Topco Scientific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Topco Scientific has no effect on the direction of ESUN Financial i.e., ESUN Financial and Topco Scientific go up and down completely randomly.
Pair Corralation between ESUN Financial and Topco Scientific
Assuming the 90 days trading horizon ESUN Financial is expected to generate 4.96 times less return on investment than Topco Scientific. But when comparing it to its historical volatility, ESUN Financial Holding is 1.52 times less risky than Topco Scientific. It trades about 0.03 of its potential returns per unit of risk. Topco Scientific Co is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 16,950 in Topco Scientific Co on September 1, 2024 and sell it today you would earn a total of 12,600 from holding Topco Scientific Co or generate 74.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ESUN Financial Holding vs. Topco Scientific Co
Performance |
| Timeline |
| ESUN Financial Holding |
| Topco Scientific |
ESUN Financial and Topco Scientific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ESUN Financial and Topco Scientific
The main advantage of trading using opposite ESUN Financial and Topco Scientific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ESUN Financial position performs unexpectedly, Topco Scientific 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 Topco Scientific will offset losses from the drop in Topco Scientific's 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 |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |