Correlation Between Taishin Financial and CTBC Financial
Can any of the company-specific risk be diversified away by investing in both Taishin Financial and CTBC 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 Taishin Financial and CTBC Financial 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 CTBC Financial Holding, you can compare the effects of market volatilities on Taishin Financial and CTBC 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 Taishin Financial with a short position of CTBC Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taishin Financial and CTBC Financial.
Diversification Opportunities for Taishin Financial and CTBC Financial
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Taishin and CTBC is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Taishin Financial Holding and CTBC Financial Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CTBC Financial Holding 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 CTBC Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CTBC Financial Holding has no effect on the direction of Taishin Financial i.e., Taishin Financial and CTBC Financial go up and down completely randomly.
Pair Corralation between Taishin Financial and CTBC Financial
Assuming the 90 days trading horizon Taishin Financial Holding is expected to generate 0.8 times more return on investment than CTBC Financial. However, Taishin Financial Holding is 1.25 times less risky than CTBC Financial. It trades about 0.03 of its potential returns per unit of risk. CTBC Financial Holding is currently generating about 0.0 per unit of risk. If you would invest 1,740 in Taishin Financial Holding on November 1, 2024 and sell it today you would earn a total of 5.00 from holding Taishin Financial Holding or generate 0.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Taishin Financial Holding vs. CTBC Financial Holding
Performance |
| Timeline |
| Taishin Financial Holding |
| CTBC Financial Holding |
Taishin Financial and CTBC Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taishin Financial and CTBC Financial
The main advantage of trading using opposite Taishin Financial and CTBC Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taishin Financial position performs unexpectedly, CTBC 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 CTBC Financial will offset losses from the drop in CTBC Financial's 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 |
| CTBC Financial vs. Fubon Financial Holding | CTBC Financial vs. Cathay Financial Holding | CTBC Financial vs. Mega Financial Holding | CTBC Financial vs. First 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |