Correlation Between Ching Feng and Taiwan Sakura
Can any of the company-specific risk be diversified away by investing in both Ching Feng and Taiwan Sakura 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 Ching Feng and Taiwan Sakura into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ching Feng Home and Taiwan Sakura Corp, you can compare the effects of market volatilities on Ching Feng and Taiwan Sakura 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 Ching Feng with a short position of Taiwan Sakura. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ching Feng and Taiwan Sakura.
Diversification Opportunities for Ching Feng and Taiwan Sakura
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Ching and Taiwan is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Ching Feng Home and Taiwan Sakura Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taiwan Sakura Corp and Ching Feng 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 Ching Feng Home are associated (or correlated) with Taiwan Sakura. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taiwan Sakura Corp has no effect on the direction of Ching Feng i.e., Ching Feng and Taiwan Sakura go up and down completely randomly.
Pair Corralation between Ching Feng and Taiwan Sakura
Assuming the 90 days trading horizon Ching Feng Home is expected to generate 1.82 times more return on investment than Taiwan Sakura. However, Ching Feng is 1.82 times more volatile than Taiwan Sakura Corp. It trades about 0.06 of its potential returns per unit of risk. Taiwan Sakura Corp is currently generating about 0.05 per unit of risk. If you would invest 1,765 in Ching Feng Home on November 1, 2024 and sell it today you would earn a total of 1,190 from holding Ching Feng Home or generate 67.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ching Feng Home vs. Taiwan Sakura Corp
Performance |
| Timeline |
| Ching Feng Home |
| Taiwan Sakura Corp |
Ching Feng and Taiwan Sakura Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ching Feng and Taiwan Sakura
The main advantage of trading using opposite Ching Feng and Taiwan Sakura positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ching Feng position performs unexpectedly, Taiwan Sakura 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 Taiwan Sakura will offset losses from the drop in Taiwan Sakura's long position.| Ching Feng vs. Globe Union Industrial | Ching Feng vs. Taiwan Fu Hsing | Ching Feng vs. Taiwan Hon Chuan | Ching Feng vs. Feng Tay Enterprises |
| Taiwan Sakura vs. Tong Yang Industry | Taiwan Sakura vs. Ta Yih Industrial | Taiwan Sakura vs. Basso Industry Corp | Taiwan Sakura vs. China Motor Corp |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |