Correlation Between Sinopac Financial and TSRC Corp

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

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

Diversification Opportunities for Sinopac Financial and TSRC Corp

0.03

Correlation Coefficient

Sinopac Financial  TSRC Corp

Significant diversification

The 3 months correlation between Sinopac and TSRC is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Sinopac Financial Holdings and TSRC Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TSRC Corp and Sinopac 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 Sinopac Financial Holdings are associated (or correlated) with TSRC Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TSRC Corp has no effect on the direction of Sinopac Financial i.e., Sinopac Financial and TSRC Corp go up and down completely randomly.

Pair Corralation between Sinopac Financial and TSRC Corp

Assuming the 90 days trading horizon Sinopac Financial Holdings is expected to generate 0.75 times more return on investment than TSRC Corp. However, Sinopac Financial Holdings is 1.33 times less risky than TSRC Corp. It trades about -0.24 of its potential returns per unit of risk. TSRC Corp is currently generating about -0.5 per unit of risk. If you would invest  2,410  in Sinopac Financial Holdings on October 10, 2024 and sell it today you would lose (110.00) from holding Sinopac Financial Holdings or give up 4.56% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Sinopac Financial Holdings  vs.  TSRC Corp

Sinopac Financial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sinopac Financial Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Sinopac Financial is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

TSRC Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TSRC Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Sinopac Financial and TSRC Corp

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

The idea behind Sinopac Financial Holdings and TSRC Corp 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.