Correlation Between Taiwan Chinsan and Concord Securities

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

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

Diversification Opportunities for Taiwan Chinsan and Concord Securities

-0.22

Correlation Coefficient

Taiwan Chinsan  Concord Securities

Very good diversification

The 3 months correlation between Taiwan and Concord is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Taiwan Chinsan Electronic and Concord Securities Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Concord Securities and Taiwan Chinsan 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 Taiwan Chinsan Electronic are associated (or correlated) with Concord Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Concord Securities has no effect on the direction of Taiwan Chinsan i.e., Taiwan Chinsan and Concord Securities go up and down completely randomly.

Pair Corralation between Taiwan Chinsan and Concord Securities

Assuming the 90 days trading horizon Taiwan Chinsan is expected to generate 2.92 times less return on investment than Concord Securities. But when comparing it to its historical volatility, Taiwan Chinsan Electronic is 1.05 times less risky than Concord Securities. It trades about 0.01 of its potential returns per unit of risk. Concord Securities Co is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1,201  in Concord Securities Co on October 24, 2024 and sell it today you would earn a total of  209.00  from holding Concord Securities Co or generate 17.4% return on investment over 90 days.

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

Taiwan Chinsan Electronic  vs.  Concord Securities Co

Taiwan Chinsan Electronic

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Taiwan Chinsan Electronic are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Taiwan Chinsan may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Concord Securities

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Concord Securities Co are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Concord Securities is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Taiwan Chinsan and Concord Securities

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

The idea behind Taiwan Chinsan Electronic and Concord Securities 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.

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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 CEOs Directory module to screen CEOs from public companies around the world.