Correlation Between TTET Union and Ta Ya
Can any of the company-specific risk be diversified away by investing in both TTET Union and Ta Ya 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 Ta Ya 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 Ta Ya Electric, you can compare the effects of market volatilities on TTET Union and Ta Ya 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 Ta Ya. Check out your portfolio center. Please also check ongoing floating volatility patterns of TTET Union and Ta Ya.
Diversification Opportunities for TTET Union and Ta Ya
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between TTET and 1609 is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding TTET Union Corp and Ta Ya Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ta Ya Electric 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 Ta Ya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ta Ya Electric has no effect on the direction of TTET Union i.e., TTET Union and Ta Ya go up and down completely randomly.
Pair Corralation between TTET Union and Ta Ya
Assuming the 90 days trading horizon TTET Union Corp is expected to under-perform the Ta Ya. But the stock apears to be less risky and, when comparing its historical volatility, TTET Union Corp is 2.0 times less risky than Ta Ya. The stock trades about -0.32 of its potential returns per unit of risk. The Ta Ya Electric is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 4,610 in Ta Ya Electric on August 29, 2024 and sell it today you would earn a total of 100.00 from holding Ta Ya Electric or generate 2.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TTET Union Corp vs. Ta Ya Electric
Performance |
| Timeline |
| TTET Union Corp |
| Ta Ya Electric |
TTET Union and Ta Ya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TTET Union and Ta Ya
The main advantage of trading using opposite TTET Union and Ta Ya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TTET Union position performs unexpectedly, Ta Ya 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 Ta Ya will offset losses from the drop in Ta Ya's long position.| TTET Union vs. Great Wall Enterprise | TTET Union vs. Uni President Enterprises Corp | TTET Union vs. Lien Hwa Industrial |
| Ta Ya vs. Yulon Motor Co | Ta Ya vs. Far Eastern Department | Ta Ya vs. China Steel Corp | Ta Ya vs. Chang Hwa Commercial |
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.
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