Correlation Between Parade Technologies and Taishin Financial
Can any of the company-specific risk be diversified away by investing in both Parade Technologies 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 Parade Technologies and Taishin Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Parade Technologies and Taishin Financial Holding, you can compare the effects of market volatilities on Parade Technologies 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 Parade Technologies with a short position of Taishin Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Parade Technologies and Taishin Financial.
Diversification Opportunities for Parade Technologies and Taishin Financial
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Parade and Taishin is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Parade Technologies 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 Parade Technologies 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 Parade Technologies 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 Parade Technologies i.e., Parade Technologies and Taishin Financial go up and down completely randomly.
Pair Corralation between Parade Technologies and Taishin Financial
Assuming the 90 days trading horizon Parade Technologies is expected to generate 9.3 times more return on investment than Taishin Financial. However, Parade Technologies is 9.3 times more volatile than Taishin Financial Holding. It trades about 0.04 of its potential returns per unit of risk. Taishin Financial Holding is currently generating about 0.0 per unit of risk. If you would invest 74,000 in Parade Technologies on September 16, 2024 and sell it today you would earn a total of 3,300 from holding Parade Technologies or generate 4.46% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Parade Technologies vs. Taishin Financial Holding
Performance |
Timeline |
Parade Technologies |
Taishin Financial Holding |
Parade Technologies and Taishin Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Parade Technologies and Taishin Financial
The main advantage of trading using opposite Parade Technologies and Taishin Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Parade Technologies 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.Parade Technologies vs. Aspeed Technology | Parade Technologies vs. Silergy Corp | Parade Technologies vs. Novatek Microelectronics Corp | Parade Technologies vs. WIN Semiconductors |
Taishin Financial vs. Mega Financial Holding | Taishin Financial vs. Taiwan Cooperative Financial | Taishin Financial vs. ESUN Financial Holding | Taishin Financial vs. First Financial Holding |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
Transaction History View history of all your transactions and understand their impact on performance | |
Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |