Correlation Between Sinopac Financial and Tachan Securities
Can any of the company-specific risk be diversified away by investing in both Sinopac Financial and Tachan Securities 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 Tachan Securities 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 Tachan Securities Co, you can compare the effects of market volatilities on Sinopac Financial and Tachan Securities 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 Tachan Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinopac Financial and Tachan Securities.
Diversification Opportunities for Sinopac Financial and Tachan Securities
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Sinopac and Tachan is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Sinopac Financial Holdings and Tachan Securities Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tachan Securities 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 Tachan Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tachan Securities has no effect on the direction of Sinopac Financial i.e., Sinopac Financial and Tachan Securities go up and down completely randomly.
Pair Corralation between Sinopac Financial and Tachan Securities
Assuming the 90 days trading horizon Sinopac Financial Holdings is expected to under-perform the Tachan Securities. In addition to that, Sinopac Financial is 1.12 times more volatile than Tachan Securities Co. It trades about -0.18 of its total potential returns per unit of risk. Tachan Securities Co is currently generating about 0.02 per unit of volatility. If you would invest 1,880 in Tachan Securities Co on October 24, 2024 and sell it today you would earn a total of 5.00 from holding Tachan Securities Co or generate 0.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Sinopac Financial Holdings vs. Tachan Securities Co
Performance |
| Timeline |
| Sinopac Financial |
| Tachan Securities |
Sinopac Financial and Tachan Securities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sinopac Financial and Tachan Securities
The main advantage of trading using opposite Sinopac Financial and Tachan Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sinopac Financial position performs unexpectedly, Tachan Securities 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 Tachan Securities will offset losses from the drop in Tachan Securities' 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 |
| Tachan Securities vs. China Metal Products | Tachan Securities vs. U Ming Marine Transport | Tachan Securities vs. CHINA DEVELOPMENT FINANCIAL | Tachan Securities vs. Sinopac Financial Holdings |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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