Correlation Between Taishin Financial and Heran
Can any of the company-specific risk be diversified away by investing in both Taishin Financial and Heran 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 Heran 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 Heran Co, you can compare the effects of market volatilities on Taishin Financial and Heran 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 Heran. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taishin Financial and Heran.
Diversification Opportunities for Taishin Financial and Heran
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Taishin and Heran is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Taishin Financial Holding and Heran Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heran 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 Heran. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heran has no effect on the direction of Taishin Financial i.e., Taishin Financial and Heran go up and down completely randomly.
Pair Corralation between Taishin Financial and Heran
Assuming the 90 days trading horizon Taishin Financial is expected to generate 2.57 times less return on investment than Heran. But when comparing it to its historical volatility, Taishin Financial Holding is 3.09 times less risky than Heran. It trades about 0.03 of its potential returns per unit of risk. Heran Co is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 10,017 in Heran Co on October 25, 2024 and sell it today you would earn a total of 233.00 from holding Heran Co or generate 2.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Taishin Financial Holding vs. Heran Co
Performance |
| Timeline |
| Taishin Financial Holding |
| Heran |
Taishin Financial and Heran Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taishin Financial and Heran
The main advantage of trading using opposite Taishin Financial and Heran positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taishin Financial position performs unexpectedly, Heran 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 Heran will offset losses from the drop in Heran's long position.| Taishin Financial vs. LandMark Optoelectronics | Taishin Financial vs. Farglory FTZ Investment | Taishin Financial vs. Formosa Chemicals Fibre | Taishin Financial vs. Taiwan Speciality Chemicals |
| Heran vs. Chicony Power Technology | Heran vs. Coretronic | Heran vs. Merry Electronics Co | Heran vs. Sampo Corp |
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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