Correlation Between Sinopac Financial and Zinwell
Can any of the company-specific risk be diversified away by investing in both Sinopac Financial and Zinwell 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 Sinopac Financial and Zinwell into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sinopac Financial Holdings and Zinwell, you can compare the effects of market volatilities on Sinopac Financial and Zinwell 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 Sinopac Financial with a short position of Zinwell. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinopac Financial and Zinwell.
Diversification Opportunities for Sinopac Financial and Zinwell
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sinopac and Zinwell is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Sinopac Financial Holdings and Zinwell in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zinwell and Sinopac 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 Sinopac Financial Holdings are associated (or correlated) with Zinwell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zinwell has no effect on the direction of Sinopac Financial i.e., Sinopac Financial and Zinwell go up and down completely randomly.
Pair Corralation between Sinopac Financial and Zinwell
Assuming the 90 days trading horizon Sinopac Financial Holdings is expected to generate 0.84 times more return on investment than Zinwell. However, Sinopac Financial Holdings is 1.19 times less risky than Zinwell. It trades about 0.01 of its potential returns per unit of risk. Zinwell is currently generating about -0.09 per unit of risk. If you would invest 2,305 in Sinopac Financial Holdings on August 30, 2024 and sell it today you would earn a total of 5.00 from holding Sinopac Financial Holdings or generate 0.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sinopac Financial Holdings vs. Zinwell
Performance |
| Timeline |
| Sinopac Financial |
| Zinwell |
Sinopac Financial and Zinwell Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sinopac Financial and Zinwell
The main advantage of trading using opposite Sinopac Financial and Zinwell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sinopac Financial position performs unexpectedly, Zinwell 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 Zinwell will offset losses from the drop in Zinwell's long position.| Sinopac Financial vs. First Financial Holding | Sinopac Financial vs. Taishin Financial Holding | Sinopac Financial vs. CTBC Financial Holding | Sinopac Financial vs. Mega Financial Holding |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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