Correlation Between Tah Hsin and Asia Polymer
Can any of the company-specific risk be diversified away by investing in both Tah Hsin and Asia Polymer 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 Tah Hsin and Asia Polymer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tah Hsin Industrial and Asia Polymer Corp, you can compare the effects of market volatilities on Tah Hsin and Asia Polymer 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 Tah Hsin with a short position of Asia Polymer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tah Hsin and Asia Polymer.
Diversification Opportunities for Tah Hsin and Asia Polymer
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Tah and Asia is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Tah Hsin Industrial and Asia Polymer Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Polymer Corp and Tah Hsin 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 Tah Hsin Industrial are associated (or correlated) with Asia Polymer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Polymer Corp has no effect on the direction of Tah Hsin i.e., Tah Hsin and Asia Polymer go up and down completely randomly.
Pair Corralation between Tah Hsin and Asia Polymer
Assuming the 90 days trading horizon Tah Hsin Industrial is expected to generate 0.12 times more return on investment than Asia Polymer. However, Tah Hsin Industrial is 8.25 times less risky than Asia Polymer. It trades about -0.01 of its potential returns per unit of risk. Asia Polymer Corp is currently generating about -0.03 per unit of risk. If you would invest 7,040 in Tah Hsin Industrial on September 3, 2024 and sell it today you would lose (10.00) from holding Tah Hsin Industrial or give up 0.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tah Hsin Industrial vs. Asia Polymer Corp
Performance |
| Timeline |
| Tah Hsin Industrial |
| Asia Polymer Corp |
Tah Hsin and Asia Polymer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tah Hsin and Asia Polymer
The main advantage of trading using opposite Tah Hsin and Asia Polymer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tah Hsin position performs unexpectedly, Asia Polymer 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 Asia Polymer will offset losses from the drop in Asia Polymer's long position.| Tah Hsin vs. Taita Chemical Co | Tah Hsin vs. China General Plastics | Tah Hsin vs. UPC Technology Corp | Tah Hsin vs. Asia Polymer Corp |
| Asia Polymer vs. USI Corp | Asia Polymer vs. Taiwan Styrene Monomer | Asia Polymer vs. UPC Technology Corp | Asia Polymer vs. Grand Pacific Petrochemical |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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