Correlation Between Sinopac Securities and Yuanta Daily

Can any of the company-specific risk be diversified away by investing in both Sinopac Securities and Yuanta Daily 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 Sinopac Securities and Yuanta Daily into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sinopac Securities Corp and Yuanta Daily Taiwan, you can compare the effects of market volatilities on Sinopac Securities and Yuanta Daily 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 Sinopac Securities with a short position of Yuanta Daily. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinopac Securities and Yuanta Daily.

Diversification Opportunities for Sinopac Securities and Yuanta Daily

-0.42

Correlation Coefficient

Sinopac Securities  Yuanta Daily

Very good diversification

The 3 months correlation between Sinopac and Yuanta is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Sinopac Securities Corp and Yuanta Daily Taiwan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yuanta Daily Taiwan and Sinopac Securities 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 Sinopac Securities Corp are associated (or correlated) with Yuanta Daily. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yuanta Daily Taiwan has no effect on the direction of Sinopac Securities i.e., Sinopac Securities and Yuanta Daily go up and down completely randomly.

Pair Corralation between Sinopac Securities and Yuanta Daily

Assuming the 90 days trading horizon Sinopac Securities Corp is expected to under-perform the Yuanta Daily. In addition to that, Sinopac Securities is 1.16 times more volatile than Yuanta Daily Taiwan. It trades about -0.11 of its total potential returns per unit of risk. Yuanta Daily Taiwan is currently generating about -0.04 per unit of volatility. If you would invest  2,281  in Yuanta Daily Taiwan on October 24, 2024 and sell it today you would lose (26.00) from holding Yuanta Daily Taiwan or give up 1.14% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

Sinopac Securities Corp  vs.  Yuanta Daily Taiwan

Sinopac Securities Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sinopac Securities Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Sinopac Securities is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Yuanta Daily Taiwan

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Yuanta Daily Taiwan are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Yuanta Daily sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sinopac Securities and Yuanta Daily

The main advantage of trading using opposite Sinopac Securities and Yuanta Daily positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sinopac Securities position performs unexpectedly, Yuanta Daily 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 Yuanta Daily will offset losses from the drop in Yuanta Daily's long position.

The idea behind Sinopac Securities Corp and Yuanta Daily Taiwan pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.