Correlation Between YuantaP Shares and Taishin Financial
Can any of the company-specific risk be diversified away by investing in both YuantaP Shares 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 YuantaP Shares and Taishin Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between YuantaP shares Taiwan Top and Taishin Financial Holding, you can compare the effects of market volatilities on YuantaP Shares 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 YuantaP Shares with a short position of Taishin Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of YuantaP Shares and Taishin Financial.
Diversification Opportunities for YuantaP Shares and Taishin Financial
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between YuantaP and Taishin is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding YuantaP shares Taiwan Top 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 YuantaP Shares 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 YuantaP shares Taiwan Top 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 YuantaP Shares i.e., YuantaP Shares and Taishin Financial go up and down completely randomly.
Pair Corralation between YuantaP Shares and Taishin Financial
Assuming the 90 days trading horizon YuantaP shares Taiwan Top is expected to under-perform the Taishin Financial. In addition to that, YuantaP Shares is 4.78 times more volatile than Taishin Financial Holding. It trades about -0.15 of its total potential returns per unit of risk. Taishin Financial Holding is currently generating about 0.1 per unit of volatility. If you would invest 4,695 in Taishin Financial Holding on December 5, 2024 and sell it today you would earn a total of 20.00 from holding Taishin Financial Holding or generate 0.43% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
YuantaP shares Taiwan Top vs. Taishin Financial Holding
Performance |
Timeline |
YuantaP shares Taiwan |
Taishin Financial Holding |
YuantaP Shares and Taishin Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with YuantaP Shares and Taishin Financial
The main advantage of trading using opposite YuantaP Shares and Taishin Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YuantaP Shares 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.YuantaP Shares vs. YuantaP shares MSCI Taiwan | YuantaP Shares vs. YuantaP shares Taiwan GreTai | YuantaP Shares vs. YuantaP shares SSE50 | YuantaP Shares vs. YuantaP shares Taiwan Mid Cap |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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