Correlation Between Asia Polymer and Taiwan Styrene
Can any of the company-specific risk be diversified away by investing in both Asia Polymer and Taiwan Styrene 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 Asia Polymer and Taiwan Styrene into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asia Polymer Corp and Taiwan Styrene Monomer, you can compare the effects of market volatilities on Asia Polymer and Taiwan Styrene 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 Asia Polymer with a short position of Taiwan Styrene. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Polymer and Taiwan Styrene.
Diversification Opportunities for Asia Polymer and Taiwan Styrene
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Asia and Taiwan is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Asia Polymer Corp and Taiwan Styrene Monomer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taiwan Styrene Monomer and Asia Polymer 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 Asia Polymer Corp are associated (or correlated) with Taiwan Styrene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taiwan Styrene Monomer has no effect on the direction of Asia Polymer i.e., Asia Polymer and Taiwan Styrene go up and down completely randomly.
Pair Corralation between Asia Polymer and Taiwan Styrene
Assuming the 90 days trading horizon Asia Polymer Corp is expected to under-perform the Taiwan Styrene. In addition to that, Asia Polymer is 1.08 times more volatile than Taiwan Styrene Monomer. It trades about -0.05 of its total potential returns per unit of risk. Taiwan Styrene Monomer is currently generating about -0.01 per unit of volatility. If you would invest 1,365 in Taiwan Styrene Monomer on August 29, 2024 and sell it today you would lose (185.00) from holding Taiwan Styrene Monomer or give up 13.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Asia Polymer Corp vs. Taiwan Styrene Monomer
Performance |
| Timeline |
| Asia Polymer Corp |
| Taiwan Styrene Monomer |
Asia Polymer and Taiwan Styrene Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia Polymer and Taiwan Styrene
The main advantage of trading using opposite Asia Polymer and Taiwan Styrene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Polymer position performs unexpectedly, Taiwan Styrene 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 Styrene will offset losses from the drop in Taiwan Styrene's long position.| Asia Polymer vs. USI Corp | Asia Polymer vs. Taiwan Styrene Monomer | Asia Polymer vs. UPC Technology Corp | Asia Polymer vs. Grand Pacific Petrochemical |
| Taiwan Styrene vs. Grand Pacific Petrochemical | Taiwan Styrene vs. USI Corp | Taiwan Styrene vs. Asia Polymer Corp | Taiwan Styrene vs. China Petrochemical Development |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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