Correlation Between Taishin Financial and Grand Plastic
Can any of the company-specific risk be diversified away by investing in both Taishin Financial and Grand Plastic 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 Grand Plastic 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 Grand Plastic Technology, you can compare the effects of market volatilities on Taishin Financial and Grand Plastic 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 Grand Plastic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taishin Financial and Grand Plastic.
Diversification Opportunities for Taishin Financial and Grand Plastic
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Taishin and Grand is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Taishin Financial Holding and Grand Plastic Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grand Plastic Technology 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 Grand Plastic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grand Plastic Technology has no effect on the direction of Taishin Financial i.e., Taishin Financial and Grand Plastic go up and down completely randomly.
Pair Corralation between Taishin Financial and Grand Plastic
Assuming the 90 days trading horizon Taishin Financial is expected to generate 7.8 times less return on investment than Grand Plastic. But when comparing it to its historical volatility, Taishin Financial Holding is 11.62 times less risky than Grand Plastic. It trades about 0.08 of its potential returns per unit of risk. Grand Plastic Technology is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 173,000 in Grand Plastic Technology on September 13, 2024 and sell it today you would earn a total of 4,000 from holding Grand Plastic Technology or generate 2.31% 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. Grand Plastic Technology
Performance |
| Timeline |
| Taishin Financial Holding |
| Grand Plastic Technology |
Taishin Financial and Grand Plastic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taishin Financial and Grand Plastic
The main advantage of trading using opposite Taishin Financial and Grand Plastic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taishin Financial position performs unexpectedly, Grand Plastic 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 Grand Plastic will offset losses from the drop in Grand Plastic'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 |
| Grand Plastic vs. First Hotel Co | Grand Plastic vs. Cowealth Medical Holding | Grand Plastic vs. Formosa International Hotels | Grand Plastic vs. HOYA Resort Hotel |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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