Correlation Between Taiwan Secom and Shinkong Insurance
Can any of the company-specific risk be diversified away by investing in both Taiwan Secom and Shinkong Insurance 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 Taiwan Secom and Shinkong Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Taiwan Secom Co and Shinkong Insurance Co, you can compare the effects of market volatilities on Taiwan Secom and Shinkong Insurance 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 Taiwan Secom with a short position of Shinkong Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taiwan Secom and Shinkong Insurance.
Diversification Opportunities for Taiwan Secom and Shinkong Insurance
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Taiwan and Shinkong is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Taiwan Secom Co and Shinkong Insurance Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinkong Insurance and Taiwan Secom 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 Taiwan Secom Co are associated (or correlated) with Shinkong Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinkong Insurance has no effect on the direction of Taiwan Secom i.e., Taiwan Secom and Shinkong Insurance go up and down completely randomly.
Pair Corralation between Taiwan Secom and Shinkong Insurance
Assuming the 90 days trading horizon Taiwan Secom Co is expected to generate 0.77 times more return on investment than Shinkong Insurance. However, Taiwan Secom Co is 1.3 times less risky than Shinkong Insurance. It trades about 0.16 of its potential returns per unit of risk. Shinkong Insurance Co is currently generating about -0.08 per unit of risk. If you would invest 12,250 in Taiwan Secom Co on November 27, 2024 and sell it today you would earn a total of 250.00 from holding Taiwan Secom Co or generate 2.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Taiwan Secom Co vs. Shinkong Insurance Co
Performance |
| Timeline |
| Taiwan Secom |
| Shinkong Insurance |
Taiwan Secom and Shinkong Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taiwan Secom and Shinkong Insurance
The main advantage of trading using opposite Taiwan Secom and Shinkong Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taiwan Secom position performs unexpectedly, Shinkong Insurance 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 Shinkong Insurance will offset losses from the drop in Shinkong Insurance's long position.| Taiwan Secom vs. Taiwan Shin Kong | Taiwan Secom vs. President Chain Store | Taiwan Secom vs. Yulon Finance Corp | Taiwan Secom vs. Giant Manufacturing Co |
| Shinkong Insurance vs. Central Reinsurance Corp | Shinkong Insurance vs. Huaku Development Co | Shinkong Insurance vs. Fubon Financial Holding | Shinkong Insurance vs. Chailease Holding Co |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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