Correlation Between Sinopac Financial and I Jang
Can any of the company-specific risk be diversified away by investing in both Sinopac Financial and I Jang 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 I Jang 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 I Jang Industrial, you can compare the effects of market volatilities on Sinopac Financial and I Jang 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 I Jang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinopac Financial and I Jang.
Diversification Opportunities for Sinopac Financial and I Jang
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sinopac and 8342 is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Sinopac Financial Holdings and I Jang Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on I Jang Industrial 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 I Jang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of I Jang Industrial has no effect on the direction of Sinopac Financial i.e., Sinopac Financial and I Jang go up and down completely randomly.
Pair Corralation between Sinopac Financial and I Jang
Assuming the 90 days trading horizon Sinopac Financial Holdings is expected to under-perform the I Jang. But the stock apears to be less risky and, when comparing its historical volatility, Sinopac Financial Holdings is 1.24 times less risky than I Jang. The stock trades about -0.13 of its potential returns per unit of risk. The I Jang Industrial is currently generating about 0.41 of returns per unit of risk over similar time horizon. If you would invest 8,840 in I Jang Industrial on November 8, 2024 and sell it today you would earn a total of 460.00 from holding I Jang Industrial or generate 5.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sinopac Financial Holdings vs. I Jang Industrial
Performance |
| Timeline |
| Sinopac Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| I Jang Industrial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
Sinopac Financial and I Jang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sinopac Financial and I Jang
The main advantage of trading using opposite Sinopac Financial and I Jang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sinopac Financial position performs unexpectedly, I Jang 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 I Jang will offset losses from the drop in I Jang's long position.The idea behind Sinopac Financial Holdings and I Jang Industrial pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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