Correlation Between Taishin Financial and Century Wind
Can any of the company-specific risk be diversified away by investing in both Taishin Financial and Century Wind 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 Century Wind 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 Century Wind Power, you can compare the effects of market volatilities on Taishin Financial and Century Wind 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 Century Wind. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taishin Financial and Century Wind.
Diversification Opportunities for Taishin Financial and Century Wind
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Taishin and Century is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Taishin Financial Holding and Century Wind Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Century Wind Power 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 Century Wind. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Century Wind Power has no effect on the direction of Taishin Financial i.e., Taishin Financial and Century Wind go up and down completely randomly.
Pair Corralation between Taishin Financial and Century Wind
Assuming the 90 days trading horizon Taishin Financial Holding is expected to generate 0.09 times more return on investment than Century Wind. However, Taishin Financial Holding is 11.51 times less risky than Century Wind. It trades about 0.06 of its potential returns per unit of risk. Century Wind Power is currently generating about -0.1 per unit of risk. If you would invest 5,050 in Taishin Financial Holding on October 30, 2024 and sell it today you would earn a total of 90.00 from holding Taishin Financial Holding or generate 1.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Taishin Financial Holding vs. Century Wind Power
Performance |
| Timeline |
| Taishin Financial Holding |
| Century Wind Power |
Taishin Financial and Century Wind Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taishin Financial and Century Wind
The main advantage of trading using opposite Taishin Financial and Century Wind positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taishin Financial position performs unexpectedly, Century Wind 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 Century Wind will offset losses from the drop in Century Wind's long position.| Taishin Financial vs. Mega Financial Holding | Taishin Financial vs. Taiwan Cooperative Financial | Taishin Financial vs. ESUN Financial Holding | Taishin Financial vs. First Financial Holding |
| Century Wind vs. Sun Sea Construction | Century Wind vs. Lihtai Construction Enterprise | Century Wind vs. Kinsus Interconnect Technology | Century Wind vs. Vate Technology Co |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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