Correlation Between Taiwan Fu and Hi Sharp
Can any of the company-specific risk be diversified away by investing in both Taiwan Fu and Hi Sharp 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 Fu and Hi Sharp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Taiwan Fu Hsing and Hi Sharp Electronics, you can compare the effects of market volatilities on Taiwan Fu and Hi Sharp 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 Fu with a short position of Hi Sharp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taiwan Fu and Hi Sharp.
Diversification Opportunities for Taiwan Fu and Hi Sharp
Very weak diversification
The 3 months correlation between Taiwan and 3128 is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Taiwan Fu Hsing and Hi Sharp Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hi Sharp Electronics and Taiwan Fu 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 Fu Hsing are associated (or correlated) with Hi Sharp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hi Sharp Electronics has no effect on the direction of Taiwan Fu i.e., Taiwan Fu and Hi Sharp go up and down completely randomly.
Pair Corralation between Taiwan Fu and Hi Sharp
Assuming the 90 days trading horizon Taiwan Fu Hsing is expected to generate 0.78 times more return on investment than Hi Sharp. However, Taiwan Fu Hsing is 1.28 times less risky than Hi Sharp. It trades about 0.04 of its potential returns per unit of risk. Hi Sharp Electronics is currently generating about -0.01 per unit of risk. If you would invest 4,790 in Taiwan Fu Hsing on September 3, 2024 and sell it today you would earn a total of 550.00 from holding Taiwan Fu Hsing or generate 11.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Taiwan Fu Hsing vs. Hi Sharp Electronics
Performance |
| Timeline |
| Taiwan Fu Hsing |
| Hi Sharp Electronics |
Taiwan Fu and Hi Sharp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taiwan Fu and Hi Sharp
The main advantage of trading using opposite Taiwan Fu and Hi Sharp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taiwan Fu position performs unexpectedly, Hi Sharp 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 Hi Sharp will offset losses from the drop in Hi Sharp's long position.| Taiwan Fu vs. Taiwan Shin Kong | Taiwan Fu vs. Taiwan Secom Co | Taiwan Fu vs. Pou Chen Corp | Taiwan Fu vs. Taiwan Hon Chuan |
| Hi Sharp vs. Taiwan Secom Co | Hi Sharp vs. Taiwan Shin Kong | Hi Sharp vs. Taiwan Fu Hsing | Hi Sharp vs. AVer Information |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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