Correlation Between TTET Union and Walsin Lihwa
Can any of the company-specific risk be diversified away by investing in both TTET Union and Walsin Lihwa 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 TTET Union and Walsin Lihwa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TTET Union Corp and Walsin Lihwa Corp, you can compare the effects of market volatilities on TTET Union and Walsin Lihwa 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 TTET Union with a short position of Walsin Lihwa. Check out your portfolio center. Please also check ongoing floating volatility patterns of TTET Union and Walsin Lihwa.
Diversification Opportunities for TTET Union and Walsin Lihwa
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between TTET and Walsin is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding TTET Union Corp and Walsin Lihwa Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walsin Lihwa Corp and TTET Union 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 TTET Union Corp are associated (or correlated) with Walsin Lihwa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walsin Lihwa Corp has no effect on the direction of TTET Union i.e., TTET Union and Walsin Lihwa go up and down completely randomly.
Pair Corralation between TTET Union and Walsin Lihwa
Assuming the 90 days trading horizon TTET Union Corp is expected to generate 0.38 times more return on investment than Walsin Lihwa. However, TTET Union Corp is 2.66 times less risky than Walsin Lihwa. It trades about -0.34 of its potential returns per unit of risk. Walsin Lihwa Corp is currently generating about -0.18 per unit of risk. If you would invest 15,400 in TTET Union Corp on August 26, 2024 and sell it today you would lose (800.00) from holding TTET Union Corp or give up 5.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TTET Union Corp vs. Walsin Lihwa Corp
Performance |
| Timeline |
| TTET Union Corp |
| Walsin Lihwa Corp |
TTET Union and Walsin Lihwa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TTET Union and Walsin Lihwa
The main advantage of trading using opposite TTET Union and Walsin Lihwa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TTET Union position performs unexpectedly, Walsin Lihwa 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 Walsin Lihwa will offset losses from the drop in Walsin Lihwa's long position.| TTET Union vs. Charoen Pokphand Enterprise | TTET Union vs. Standard Foods Corp | TTET Union vs. Uni President Enterprises Corp | TTET Union vs. Great Wall Enterprise |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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