Correlation Between Sinopac Financial and Horizon Securities
Can any of the company-specific risk be diversified away by investing in both Sinopac Financial and Horizon Securities 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 Horizon Securities 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 Horizon Securities Co, you can compare the effects of market volatilities on Sinopac Financial and Horizon Securities 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 Horizon Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinopac Financial and Horizon Securities.
Diversification Opportunities for Sinopac Financial and Horizon Securities
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sinopac and Horizon is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Sinopac Financial Holdings and Horizon Securities Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Horizon Securities 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 Horizon Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Horizon Securities has no effect on the direction of Sinopac Financial i.e., Sinopac Financial and Horizon Securities go up and down completely randomly.
Pair Corralation between Sinopac Financial and Horizon Securities
Assuming the 90 days trading horizon Sinopac Financial Holdings is expected to generate 0.85 times more return on investment than Horizon Securities. However, Sinopac Financial Holdings is 1.18 times less risky than Horizon Securities. It trades about 0.02 of its potential returns per unit of risk. Horizon Securities Co is currently generating about -0.22 per unit of risk. If you would invest 2,355 in Sinopac Financial Holdings on September 25, 2024 and sell it today you would earn a total of 10.00 from holding Sinopac Financial Holdings or generate 0.42% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Sinopac Financial Holdings vs. Horizon Securities Co
Performance |
Timeline |
Sinopac Financial |
Horizon Securities |
Sinopac Financial and Horizon Securities Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sinopac Financial and Horizon Securities
The main advantage of trading using opposite Sinopac Financial and Horizon Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sinopac Financial position performs unexpectedly, Horizon Securities 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 Horizon Securities will offset losses from the drop in Horizon Securities' long position.Sinopac Financial vs. Taiwan Semiconductor Manufacturing | Sinopac Financial vs. Hon Hai Precision | Sinopac Financial vs. MediaTek | Sinopac Financial vs. Chunghwa Telecom Co |
Horizon Securities vs. Concord Securities Co | Horizon Securities vs. Capital Securities Corp | Horizon Securities vs. Sinopac Financial Holdings | Horizon Securities vs. Inventec 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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