Correlation Between Sinopac Financial and Taishin Financial
Can any of the company-specific risk be diversified away by investing in both Sinopac Financial and Taishin Financial 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 Taishin Financial 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 Taishin Financial Holding, you can compare the effects of market volatilities on Sinopac Financial and Taishin Financial 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 Taishin Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinopac Financial and Taishin Financial.
Diversification Opportunities for Sinopac Financial and Taishin Financial
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sinopac and Taishin is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Sinopac Financial Holdings and Taishin Financial Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taishin Financial Holding 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 Taishin Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taishin Financial Holding has no effect on the direction of Sinopac Financial i.e., Sinopac Financial and Taishin Financial go up and down completely randomly.
Pair Corralation between Sinopac Financial and Taishin Financial
Assuming the 90 days trading horizon Sinopac Financial Holdings is expected to generate 2.95 times more return on investment than Taishin Financial. However, Sinopac Financial is 2.95 times more volatile than Taishin Financial Holding. It trades about 0.03 of its potential returns per unit of risk. Taishin Financial Holding is currently generating about -0.04 per unit of risk. If you would invest 2,275 in Sinopac Financial Holdings on August 28, 2024 and sell it today you would earn a total of 80.00 from holding Sinopac Financial Holdings or generate 3.52% 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. Taishin Financial Holding
Performance |
| Timeline |
| Sinopac Financial |
| Taishin Financial Holding |
Sinopac Financial and Taishin Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sinopac Financial and Taishin Financial
The main advantage of trading using opposite Sinopac Financial and Taishin Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sinopac Financial position performs unexpectedly, Taishin Financial 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 Taishin Financial will offset losses from the drop in Taishin Financial'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 |
| Taishin Financial vs. Farglory FTZ Investment | Taishin Financial vs. Arima Communications Corp | Taishin Financial vs. Sports Gear Co | Taishin Financial vs. TWOWAY Communications |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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