Correlation Between IBF Financial and Taiwan Secom
Can any of the company-specific risk be diversified away by investing in both IBF Financial and Taiwan Secom 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 IBF Financial and Taiwan Secom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IBF Financial Holdings and Taiwan Secom Co, you can compare the effects of market volatilities on IBF Financial and Taiwan Secom 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 IBF Financial with a short position of Taiwan Secom. Check out your portfolio center. Please also check ongoing floating volatility patterns of IBF Financial and Taiwan Secom.
Diversification Opportunities for IBF Financial and Taiwan Secom
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IBF and Taiwan is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding IBF Financial Holdings and Taiwan Secom Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taiwan Secom and IBF 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 IBF Financial Holdings are associated (or correlated) with Taiwan Secom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taiwan Secom has no effect on the direction of IBF Financial i.e., IBF Financial and Taiwan Secom go up and down completely randomly.
Pair Corralation between IBF Financial and Taiwan Secom
Assuming the 90 days trading horizon IBF Financial Holdings is expected to under-perform the Taiwan Secom. But the stock apears to be less risky and, when comparing its historical volatility, IBF Financial Holdings is 1.56 times less risky than Taiwan Secom. The stock trades about -0.08 of its potential returns per unit of risk. The Taiwan Secom Co is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 13,550 in Taiwan Secom Co on August 30, 2024 and sell it today you would lose (300.00) from holding Taiwan Secom Co or give up 2.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
IBF Financial Holdings vs. Taiwan Secom Co
Performance |
| Timeline |
| IBF Financial Holdings |
| Taiwan Secom |
IBF Financial and Taiwan Secom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IBF Financial and Taiwan Secom
The main advantage of trading using opposite IBF Financial and Taiwan Secom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IBF Financial position performs unexpectedly, Taiwan Secom 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 Taiwan Secom will offset losses from the drop in Taiwan Secom's long position.| IBF Financial vs. Tex Ray Industrial Co | IBF Financial vs. Chain Chon Industrial | IBF Financial vs. Jentech Precision Industrial | IBF Financial vs. Excelsior Medical Co |
| Taiwan Secom vs. Yulon Motor Co | Taiwan Secom vs. Far Eastern Department | Taiwan Secom vs. China Steel Corp | Taiwan Secom vs. Chang Hwa Commercial |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |