Correlation Between Taishin Financial and Sports Gear

Can any of the company-specific risk be diversified away by investing in both Taishin Financial and Sports Gear 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 Taishin Financial and Sports Gear into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Taishin Financial Holding and Sports Gear Co, you can compare the effects of market volatilities on Taishin Financial and Sports Gear 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 Taishin Financial with a short position of Sports Gear. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taishin Financial and Sports Gear.

Diversification Opportunities for Taishin Financial and Sports Gear

-0.49

Correlation Coefficient

Taishin Financial  Sports Gear

Very good diversification

The 3 months correlation between Taishin and Sports is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Taishin Financial Holding and Sports Gear Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sports Gear and Taishin Financial 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 Taishin Financial Holding are associated (or correlated) with Sports Gear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sports Gear has no effect on the direction of Taishin Financial i.e., Taishin Financial and Sports Gear go up and down completely randomly.

Pair Corralation between Taishin Financial and Sports Gear

If you would invest  4,585  in Taishin Financial Holding on October 23, 2024 and sell it today you would earn a total of  120.00  from holding Taishin Financial Holding or generate 2.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

Taishin Financial Holding  vs.  Sports Gear Co

Taishin Financial Holding

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Taishin Financial Holding are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Taishin Financial is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Sports Gear

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sports Gear Co are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Sports Gear may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Taishin Financial and Sports Gear

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

The idea behind Taishin Financial Holding and Sports Gear Co 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.

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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.