Correlation Between TTET Union and Taiwan Shin
Can any of the company-specific risk be diversified away by investing in both TTET Union and Taiwan Shin 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 Taiwan Shin 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 Taiwan Shin Kong, you can compare the effects of market volatilities on TTET Union and Taiwan Shin 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 Taiwan Shin. Check out your portfolio center. Please also check ongoing floating volatility patterns of TTET Union and Taiwan Shin.
Diversification Opportunities for TTET Union and Taiwan Shin
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between TTET and Taiwan is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding TTET Union Corp and Taiwan Shin Kong in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taiwan Shin Kong 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 Taiwan Shin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taiwan Shin Kong has no effect on the direction of TTET Union i.e., TTET Union and Taiwan Shin go up and down completely randomly.
Pair Corralation between TTET Union and Taiwan Shin
Assuming the 90 days trading horizon TTET Union Corp is expected to under-perform the Taiwan Shin. In addition to that, TTET Union is 1.5 times more volatile than Taiwan Shin Kong. It trades about -0.29 of its total potential returns per unit of risk. Taiwan Shin Kong is currently generating about -0.06 per unit of volatility. If you would invest 4,150 in Taiwan Shin Kong on August 28, 2024 and sell it today you would lose (25.00) from holding Taiwan Shin Kong or give up 0.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TTET Union Corp vs. Taiwan Shin Kong
Performance |
| Timeline |
| TTET Union Corp |
| Taiwan Shin Kong |
TTET Union and Taiwan Shin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TTET Union and Taiwan Shin
The main advantage of trading using opposite TTET Union and Taiwan Shin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TTET Union position performs unexpectedly, Taiwan Shin 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 Taiwan Shin will offset losses from the drop in Taiwan Shin's long position.| TTET Union vs. Taiwan Cement Corp | TTET Union vs. Ruentex Development Co | TTET Union vs. Symtek Automation Asia | TTET Union vs. CTCI Corp |
| Taiwan Shin vs. Sunny Friend Environmental | Taiwan Shin vs. TTET Union Corp | Taiwan Shin vs. ECOVE Environment Corp | Taiwan Shin vs. Yulon Finance Corp |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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