Correlation Between Shinkong Synthetic and Taiwan Mobile
Can any of the company-specific risk be diversified away by investing in both Shinkong Synthetic and Taiwan Mobile 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 Shinkong Synthetic and Taiwan Mobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shinkong Synthetic Fiber and Taiwan Mobile Co, you can compare the effects of market volatilities on Shinkong Synthetic and Taiwan Mobile 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 Shinkong Synthetic with a short position of Taiwan Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinkong Synthetic and Taiwan Mobile.
Diversification Opportunities for Shinkong Synthetic and Taiwan Mobile
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Shinkong and Taiwan is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Shinkong Synthetic Fiber and Taiwan Mobile Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taiwan Mobile and Shinkong Synthetic 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 Shinkong Synthetic Fiber are associated (or correlated) with Taiwan Mobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taiwan Mobile has no effect on the direction of Shinkong Synthetic i.e., Shinkong Synthetic and Taiwan Mobile go up and down completely randomly.
Pair Corralation between Shinkong Synthetic and Taiwan Mobile
Assuming the 90 days trading horizon Shinkong Synthetic Fiber is expected to under-perform the Taiwan Mobile. In addition to that, Shinkong Synthetic is 1.35 times more volatile than Taiwan Mobile Co. It trades about -0.02 of its total potential returns per unit of risk. Taiwan Mobile Co is currently generating about 0.03 per unit of volatility. If you would invest 10,150 in Taiwan Mobile Co on November 27, 2024 and sell it today you would earn a total of 1,200 from holding Taiwan Mobile Co or generate 11.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinkong Synthetic Fiber vs. Taiwan Mobile Co
Performance |
| Timeline |
| Shinkong Synthetic Fiber |
| Taiwan Mobile |
Shinkong Synthetic and Taiwan Mobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinkong Synthetic and Taiwan Mobile
The main advantage of trading using opposite Shinkong Synthetic and Taiwan Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinkong Synthetic position performs unexpectedly, Taiwan Mobile 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 Mobile will offset losses from the drop in Taiwan Mobile's long position.| Shinkong Synthetic vs. Chung Hwa Chemical | Shinkong Synthetic vs. China Man Made Fiber | Shinkong Synthetic vs. Sesoda Corp | Shinkong Synthetic vs. Everlight Chemical Industrial |
| Taiwan Mobile vs. Chunghwa Telecom Co | Taiwan Mobile vs. Far EasTone Telecommunications | Taiwan Mobile vs. CTBC Financial Holding | Taiwan Mobile vs. Fubon Financial Holding |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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