Correlation Between Farglory FTZ and Taishin Financial
Can any of the company-specific risk be diversified away by investing in both Farglory FTZ 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 Farglory FTZ and Taishin Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Farglory FTZ Investment and Taishin Financial Holding, you can compare the effects of market volatilities on Farglory FTZ 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 Farglory FTZ with a short position of Taishin Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Farglory FTZ and Taishin Financial.
Diversification Opportunities for Farglory FTZ and Taishin Financial
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Farglory and Taishin is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Farglory FTZ Investment 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 Farglory FTZ 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 Farglory FTZ Investment 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 Farglory FTZ i.e., Farglory FTZ and Taishin Financial go up and down completely randomly.
Pair Corralation between Farglory FTZ and Taishin Financial
Assuming the 90 days trading horizon Farglory FTZ Investment is expected to generate 6.28 times more return on investment than Taishin Financial. However, Farglory FTZ is 6.28 times more volatile than Taishin Financial Holding. It trades about 0.04 of its potential returns per unit of risk. Taishin Financial Holding is currently generating about 0.05 per unit of risk. If you would invest 4,195 in Farglory FTZ Investment on October 25, 2024 and sell it today you would earn a total of 40.00 from holding Farglory FTZ Investment or generate 0.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Farglory FTZ Investment vs. Taishin Financial Holding
Performance |
| Timeline |
| Farglory FTZ Investment |
| Taishin Financial Holding |
Farglory FTZ and Taishin Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Farglory FTZ and Taishin Financial
The main advantage of trading using opposite Farglory FTZ and Taishin Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Farglory FTZ 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.| Farglory FTZ vs. Evergreen International Storage | Farglory FTZ vs. China Container Terminal | Farglory FTZ vs. Sincere Navigation Corp | Farglory FTZ vs. CSBC Corp Taiwan |
| Taishin Financial vs. LandMark Optoelectronics | Taishin Financial vs. Farglory FTZ Investment | Taishin Financial vs. Formosa Chemicals Fibre | Taishin Financial vs. Taiwan Speciality Chemicals |
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 CEOs Directory module to screen CEOs from public companies around the world.
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