Correlation Between Taishin Financial and Sports Gear
Can any of the company-specific risk be diversified away by investing in both Taishin Financial and Sports Gear 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 Sports Gear 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 Sports Gear Co, you can compare the effects of market volatilities on Taishin Financial and Sports Gear 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 Sports Gear. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taishin Financial and Sports Gear.
Diversification Opportunities for Taishin Financial and Sports Gear
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Taishin and Sports is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Taishin Financial Holding and Sports Gear Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sports Gear 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 Sports Gear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sports Gear has no effect on the direction of Taishin Financial i.e., Taishin Financial and Sports Gear go up and down completely randomly.
Pair Corralation between Taishin Financial and Sports Gear
Assuming the 90 days trading horizon Taishin Financial Holding is expected to generate 0.11 times more return on investment than Sports Gear. However, Taishin Financial Holding is 9.18 times less risky than Sports Gear. It trades about 0.55 of its potential returns per unit of risk. Sports Gear Co is currently generating about -0.23 per unit of risk. If you would invest 4,570 in Taishin Financial Holding on October 9, 2024 and sell it today you would earn a total of 115.00 from holding Taishin Financial Holding or generate 2.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Taishin Financial Holding vs. Sports Gear Co
Performance |
| Timeline |
| Taishin Financial Holding |
| Sports Gear |
Taishin Financial and Sports Gear Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taishin Financial and Sports Gear
The main advantage of trading using opposite Taishin Financial and Sports Gear positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taishin Financial position performs unexpectedly, Sports Gear 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 Sports Gear will offset losses from the drop in Sports Gear's long position.| Taishin Financial vs. Maxigen Biotech | Taishin Financial vs. Microelectronics Technology | Taishin Financial vs. Simplo Technology Co | Taishin Financial vs. Air Asia Co |
| Sports Gear vs. Sunny Friend Environmental | Sports Gear vs. Cleanaway Co | Sports Gear vs. Charoen Pokphand Enterprise | Sports Gear vs. TTET Union 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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