Correlation Between Taiwan Cement and China Glaze
Can any of the company-specific risk be diversified away by investing in both Taiwan Cement and China Glaze 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 Cement and China Glaze into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Taiwan Cement Corp and China Glaze Co, you can compare the effects of market volatilities on Taiwan Cement and China Glaze 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 Cement with a short position of China Glaze. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taiwan Cement and China Glaze.
Diversification Opportunities for Taiwan Cement and China Glaze
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Taiwan and China is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Taiwan Cement Corp and China Glaze Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Glaze and Taiwan Cement 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 Cement Corp are associated (or correlated) with China Glaze. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Glaze has no effect on the direction of Taiwan Cement i.e., Taiwan Cement and China Glaze go up and down completely randomly.
Pair Corralation between Taiwan Cement and China Glaze
Assuming the 90 days trading horizon Taiwan Cement is expected to generate 38.46 times less return on investment than China Glaze. But when comparing it to its historical volatility, Taiwan Cement Corp is 2.59 times less risky than China Glaze. It trades about 0.0 of its potential returns per unit of risk. China Glaze Co is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,313 in China Glaze Co on August 30, 2024 and sell it today you would earn a total of 862.00 from holding China Glaze Co or generate 65.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Taiwan Cement Corp vs. China Glaze Co
Performance |
| Timeline |
| Taiwan Cement Corp |
| China Glaze |
Taiwan Cement and China Glaze Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taiwan Cement and China Glaze
The main advantage of trading using opposite Taiwan Cement and China Glaze positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taiwan Cement position performs unexpectedly, China Glaze 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 China Glaze will offset losses from the drop in China Glaze's long position.| Taiwan Cement vs. Asia Cement Corp | Taiwan Cement vs. Formosa Plastics Corp | Taiwan Cement vs. Nan Ya Plastics | Taiwan Cement vs. China Steel Corp |
| China Glaze vs. Champion Building Materials | China Glaze vs. Taiwan Glass Ind | China Glaze vs. Chung Hwa Pulp | China Glaze vs. China Man Made Fiber |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |