Correlation Between Sinopac Financial and Sentronic International
Can any of the company-specific risk be diversified away by investing in both Sinopac Financial and Sentronic International 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 Sentronic International 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 Sentronic International, you can compare the effects of market volatilities on Sinopac Financial and Sentronic International 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 Sentronic International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinopac Financial and Sentronic International.
Diversification Opportunities for Sinopac Financial and Sentronic International
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sinopac and Sentronic is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Sinopac Financial Holdings and Sentronic International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sentronic International 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 Sentronic International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sentronic International has no effect on the direction of Sinopac Financial i.e., Sinopac Financial and Sentronic International go up and down completely randomly.
Pair Corralation between Sinopac Financial and Sentronic International
Assuming the 90 days trading horizon Sinopac Financial Holdings is expected to generate 0.55 times more return on investment than Sentronic International. However, Sinopac Financial Holdings is 1.82 times less risky than Sentronic International. It trades about -0.01 of its potential returns per unit of risk. Sentronic International is currently generating about -0.1 per unit of risk. If you would invest 2,385 in Sinopac Financial Holdings on September 13, 2024 and sell it today you would lose (20.00) from holding Sinopac Financial Holdings or give up 0.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sinopac Financial Holdings vs. Sentronic International
Performance |
| Timeline |
| Sinopac Financial |
| Sentronic International |
Sinopac Financial and Sentronic International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sinopac Financial and Sentronic International
The main advantage of trading using opposite Sinopac Financial and Sentronic International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sinopac Financial position performs unexpectedly, Sentronic International 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 Sentronic International will offset losses from the drop in Sentronic International'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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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