Correlation Between Sinopac Financial and Chong Hong
Can any of the company-specific risk be diversified away by investing in both Sinopac Financial and Chong Hong 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 Chong Hong 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 Chong Hong Construction, you can compare the effects of market volatilities on Sinopac Financial and Chong Hong 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 Chong Hong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinopac Financial and Chong Hong.
Diversification Opportunities for Sinopac Financial and Chong Hong
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sinopac and Chong is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Sinopac Financial Holdings and Chong Hong Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chong Hong Construction 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 Chong Hong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chong Hong Construction has no effect on the direction of Sinopac Financial i.e., Sinopac Financial and Chong Hong go up and down completely randomly.
Pair Corralation between Sinopac Financial and Chong Hong
Assuming the 90 days trading horizon Sinopac Financial is expected to generate 2.96 times less return on investment than Chong Hong. But when comparing it to its historical volatility, Sinopac Financial Holdings is 1.51 times less risky than Chong Hong. It trades about 0.01 of its potential returns per unit of risk. Chong Hong Construction is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 8,610 in Chong Hong Construction on August 30, 2024 and sell it today you would earn a total of 70.00 from holding Chong Hong Construction or generate 0.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sinopac Financial Holdings vs. Chong Hong Construction
Performance |
| Timeline |
| Sinopac Financial |
| Chong Hong Construction |
Sinopac Financial and Chong Hong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sinopac Financial and Chong Hong
The main advantage of trading using opposite Sinopac Financial and Chong Hong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sinopac Financial position performs unexpectedly, Chong Hong 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 Chong Hong will offset losses from the drop in Chong Hong'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 |
| Chong Hong vs. Tainan Spinning Co | Chong Hong vs. Carnival Industrial Corp | Chong Hong vs. Symtek Automation Asia | Chong Hong vs. CTCI 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |