Correlation Between United Radiant and Taishin Financial
Can any of the company-specific risk be diversified away by investing in both United Radiant 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 United Radiant and Taishin Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Radiant Technology and Taishin Financial Holding, you can compare the effects of market volatilities on United Radiant 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 United Radiant with a short position of Taishin Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Radiant and Taishin Financial.
Diversification Opportunities for United Radiant and Taishin Financial
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between United and Taishin is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding United Radiant Technology 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 United Radiant 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 United Radiant Technology 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 United Radiant i.e., United Radiant and Taishin Financial go up and down completely randomly.
Pair Corralation between United Radiant and Taishin Financial
Assuming the 90 days trading horizon United Radiant Technology is expected to under-perform the Taishin Financial. In addition to that, United Radiant is 7.37 times more volatile than Taishin Financial Holding. It trades about -0.12 of its total potential returns per unit of risk. Taishin Financial Holding is currently generating about 0.48 per unit of volatility. If you would invest 4,585 in Taishin Financial Holding on October 25, 2024 and sell it today you would earn a total of 110.00 from holding Taishin Financial Holding or generate 2.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Radiant Technology vs. Taishin Financial Holding
Performance |
| Timeline |
| United Radiant Technology |
| Taishin Financial Holding |
United Radiant and Taishin Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Radiant and Taishin Financial
The main advantage of trading using opposite United Radiant and Taishin Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Radiant 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.| United Radiant vs. Sports Gear Co | United Radiant vs. Sunmax Biotechnology Co | United Radiant vs. Wei Chuan Foods | United Radiant vs. Tehmag Foods |
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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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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