Correlation Between Taishin Financial and Deltamac Taiwan
Can any of the company-specific risk be diversified away by investing in both Taishin Financial and Deltamac Taiwan 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 Deltamac Taiwan 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 Deltamac Taiwan Co, you can compare the effects of market volatilities on Taishin Financial and Deltamac Taiwan 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 Deltamac Taiwan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taishin Financial and Deltamac Taiwan.
Diversification Opportunities for Taishin Financial and Deltamac Taiwan
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Taishin and Deltamac is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Taishin Financial Holding and Deltamac Taiwan Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deltamac Taiwan 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 Deltamac Taiwan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deltamac Taiwan has no effect on the direction of Taishin Financial i.e., Taishin Financial and Deltamac Taiwan go up and down completely randomly.
Pair Corralation between Taishin Financial and Deltamac Taiwan
Assuming the 90 days trading horizon Taishin Financial is expected to generate 13.68 times less return on investment than Deltamac Taiwan. But when comparing it to its historical volatility, Taishin Financial Holding is 31.0 times less risky than Deltamac Taiwan. It trades about 0.05 of its potential returns per unit of risk. Deltamac Taiwan Co is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 3,205 in Deltamac Taiwan Co on October 25, 2024 and sell it today you would lose (45.00) from holding Deltamac Taiwan Co or give up 1.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Taishin Financial Holding vs. Deltamac Taiwan Co
Performance |
| Timeline |
| Taishin Financial Holding |
| Deltamac Taiwan |
Taishin Financial and Deltamac Taiwan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taishin Financial and Deltamac Taiwan
The main advantage of trading using opposite Taishin Financial and Deltamac Taiwan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taishin Financial position performs unexpectedly, Deltamac Taiwan 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 Deltamac Taiwan will offset losses from the drop in Deltamac Taiwan'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 |
| Deltamac Taiwan vs. Power Wind Health | Deltamac Taiwan vs. Chung Lien Transportation | Deltamac Taiwan vs. Softstar Entertainment | Deltamac Taiwan vs. Great China Metal |
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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