Correlation Between Taishin Financial and GeneFerm Biotechnology
Can any of the company-specific risk be diversified away by investing in both Taishin Financial and GeneFerm Biotechnology 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 GeneFerm Biotechnology 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 GeneFerm Biotechnology Co, you can compare the effects of market volatilities on Taishin Financial and GeneFerm Biotechnology 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 GeneFerm Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taishin Financial and GeneFerm Biotechnology.
Diversification Opportunities for Taishin Financial and GeneFerm Biotechnology
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Taishin and GeneFerm is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Taishin Financial Holding and GeneFerm Biotechnology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GeneFerm Biotechnology 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 GeneFerm Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GeneFerm Biotechnology has no effect on the direction of Taishin Financial i.e., Taishin Financial and GeneFerm Biotechnology go up and down completely randomly.
Pair Corralation between Taishin Financial and GeneFerm Biotechnology
Assuming the 90 days trading horizon Taishin Financial Holding is expected to generate 0.17 times more return on investment than GeneFerm Biotechnology. However, Taishin Financial Holding is 6.02 times less risky than GeneFerm Biotechnology. It trades about 0.01 of its potential returns per unit of risk. GeneFerm Biotechnology Co is currently generating about -0.07 per unit of risk. If you would invest 5,090 in Taishin Financial Holding on September 4, 2024 and sell it today you would earn a total of 50.00 from holding Taishin Financial Holding or generate 0.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.59% |
| Values | Daily Returns |
Taishin Financial Holding vs. GeneFerm Biotechnology Co
Performance |
| Timeline |
| Taishin Financial Holding |
| GeneFerm Biotechnology |
Taishin Financial and GeneFerm Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taishin Financial and GeneFerm Biotechnology
The main advantage of trading using opposite Taishin Financial and GeneFerm Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taishin Financial position performs unexpectedly, GeneFerm Biotechnology 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 GeneFerm Biotechnology will offset losses from the drop in GeneFerm Biotechnology's long position.| Taishin Financial vs. GeneFerm Biotechnology Co | Taishin Financial vs. Cheng Mei Materials | Taishin Financial vs. Eternal Materials Co | Taishin Financial vs. Formosa Chemicals Fibre |
| GeneFerm Biotechnology vs. Ruentex Development Co | GeneFerm Biotechnology vs. Symtek Automation Asia | GeneFerm Biotechnology vs. CTCI Corp | GeneFerm Biotechnology vs. Information Technology Total |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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