Correlation Between Taishin Financial and President Securities
Can any of the company-specific risk be diversified away by investing in both Taishin Financial and President Securities 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 Taishin Financial and President Securities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Taishin Financial Holding and President Securities Corp, you can compare the effects of market volatilities on Taishin Financial and President Securities 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 Taishin Financial with a short position of President Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taishin Financial and President Securities.
Diversification Opportunities for Taishin Financial and President Securities
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Taishin and President is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Taishin Financial Holding and President Securities Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on President Securities Corp and Taishin 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 Taishin Financial Holding are associated (or correlated) with President Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of President Securities Corp has no effect on the direction of Taishin Financial i.e., Taishin Financial and President Securities go up and down completely randomly.
Pair Corralation between Taishin Financial and President Securities
Assuming the 90 days trading horizon Taishin Financial is expected to generate 2.47 times less return on investment than President Securities. In addition to that, Taishin Financial is 1.03 times more volatile than President Securities Corp. It trades about 0.05 of its total potential returns per unit of risk. President Securities Corp is currently generating about 0.13 per unit of volatility. If you would invest 2,620 in President Securities Corp on August 26, 2024 and sell it today you would earn a total of 60.00 from holding President Securities Corp or generate 2.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Taishin Financial Holding vs. President Securities Corp
Performance |
| Timeline |
| Taishin Financial Holding |
| President Securities Corp |
Taishin Financial and President Securities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taishin Financial and President Securities
The main advantage of trading using opposite Taishin Financial and President Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taishin Financial position performs unexpectedly, President Securities 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 President Securities will offset losses from the drop in President Securities' long position.| Taishin Financial vs. CTBC Financial Holding | Taishin Financial vs. First Financial Holding | Taishin Financial vs. Mega Financial Holding | Taishin Financial vs. ESUN Financial Holding |
| President Securities vs. Yuanta Financial Holdings | President Securities vs. IBF Financial Holdings | President Securities vs. China Development Financial | President Securities vs. Taiwan Business Bank |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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