Correlation Between Asia Polymer and Tah Hsin
Can any of the company-specific risk be diversified away by investing in both Asia Polymer and Tah Hsin 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 Tah Hsin 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 Tah Hsin Industrial, you can compare the effects of market volatilities on Asia Polymer and Tah Hsin 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 Tah Hsin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Polymer and Tah Hsin.
Diversification Opportunities for Asia Polymer and Tah Hsin
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Asia and Tah is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Asia Polymer Corp and Tah Hsin Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tah Hsin Industrial 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 Tah Hsin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tah Hsin Industrial has no effect on the direction of Asia Polymer i.e., Asia Polymer and Tah Hsin go up and down completely randomly.
Pair Corralation between Asia Polymer and Tah Hsin
Assuming the 90 days trading horizon Asia Polymer Corp is expected to under-perform the Tah Hsin. In addition to that, Asia Polymer is 4.35 times more volatile than Tah Hsin Industrial. It trades about -0.04 of its total potential returns per unit of risk. Tah Hsin Industrial is currently generating about -0.01 per unit of volatility. If you would invest 7,091 in Tah Hsin Industrial on September 3, 2024 and sell it today you would lose (61.00) from holding Tah Hsin Industrial or give up 0.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asia Polymer Corp vs. Tah Hsin Industrial
Performance |
| Timeline |
| Asia Polymer Corp |
| Tah Hsin Industrial |
Asia Polymer and Tah Hsin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia Polymer and Tah Hsin
The main advantage of trading using opposite Asia Polymer and Tah Hsin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Polymer position performs unexpectedly, Tah Hsin 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 Tah Hsin will offset losses from the drop in Tah Hsin'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 |
| Tah Hsin vs. Taita Chemical Co | Tah Hsin vs. China General Plastics | Tah Hsin vs. UPC Technology Corp | Tah Hsin vs. Asia Polymer 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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