Correlation Between Sinopac Financial and Far Eastern
Can any of the company-specific risk be diversified away by investing in both Sinopac Financial and Far Eastern 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 Far Eastern 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 Far Eastern Department, you can compare the effects of market volatilities on Sinopac Financial and Far Eastern 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 Far Eastern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinopac Financial and Far Eastern.
Diversification Opportunities for Sinopac Financial and Far Eastern
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sinopac and Far is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Sinopac Financial Holdings and Far Eastern Department in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Far Eastern Department 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 Far Eastern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Far Eastern Department has no effect on the direction of Sinopac Financial i.e., Sinopac Financial and Far Eastern go up and down completely randomly.
Pair Corralation between Sinopac Financial and Far Eastern
Assuming the 90 days trading horizon Sinopac Financial Holdings is expected to generate 1.49 times more return on investment than Far Eastern. However, Sinopac Financial is 1.49 times more volatile than Far Eastern Department. It trades about 0.06 of its potential returns per unit of risk. Far Eastern Department is currently generating about -0.22 per unit of risk. If you would invest 2,330 in Sinopac Financial Holdings on September 7, 2024 and sell it today you would earn a total of 100.00 from holding Sinopac Financial Holdings or generate 4.29% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 98.41% |
Values | Daily Returns |
Sinopac Financial Holdings vs. Far Eastern Department
Performance |
Timeline |
Sinopac Financial |
Far Eastern Department |
Sinopac Financial and Far Eastern Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sinopac Financial and Far Eastern
The main advantage of trading using opposite Sinopac Financial and Far Eastern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sinopac Financial position performs unexpectedly, Far Eastern 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 Far Eastern will offset losses from the drop in Far Eastern's long position.Sinopac Financial vs. Mega Financial Holding | Sinopac Financial vs. Taiwan Semiconductor Manufacturing | Sinopac Financial vs. Fubon Financial Holding | Sinopac Financial vs. CTBC Financial Holding |
Far Eastern vs. LongDa Construction Development | Far Eastern vs. HannStar Board Corp | Far Eastern vs. Ruentex Development Co | Far Eastern vs. Leatec Fine Ceramics |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
Fundamental Analysis View fundamental data based on most recent published financial statements | |
Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Economic Indicators Top statistical indicators that provide insights into how an economy is performing |