Correlation Between Tainan Spinning and Kee Tai
Can any of the company-specific risk be diversified away by investing in both Tainan Spinning and Kee Tai 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 Tainan Spinning and Kee Tai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tainan Spinning Co and Kee Tai Properties, you can compare the effects of market volatilities on Tainan Spinning and Kee Tai 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 Tainan Spinning with a short position of Kee Tai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tainan Spinning and Kee Tai.
Diversification Opportunities for Tainan Spinning and Kee Tai
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tainan and Kee is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Tainan Spinning Co and Kee Tai Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kee Tai Properties and Tainan Spinning 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 Tainan Spinning Co are associated (or correlated) with Kee Tai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kee Tai Properties has no effect on the direction of Tainan Spinning i.e., Tainan Spinning and Kee Tai go up and down completely randomly.
Pair Corralation between Tainan Spinning and Kee Tai
Assuming the 90 days trading horizon Tainan Spinning is expected to generate 14.06 times less return on investment than Kee Tai. But when comparing it to its historical volatility, Tainan Spinning Co is 1.51 times less risky than Kee Tai. It trades about 0.0 of its potential returns per unit of risk. Kee Tai Properties is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,600 in Kee Tai Properties on September 1, 2024 and sell it today you would earn a total of 15.00 from holding Kee Tai Properties or generate 0.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Tainan Spinning Co vs. Kee Tai Properties
Performance |
| Timeline |
| Tainan Spinning |
| Kee Tai Properties |
Tainan Spinning and Kee Tai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tainan Spinning and Kee Tai
The main advantage of trading using opposite Tainan Spinning and Kee Tai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tainan Spinning position performs unexpectedly, Kee Tai 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 Kee Tai will offset losses from the drop in Kee Tai's long position.| Tainan Spinning vs. Lealea Enterprise Co | Tainan Spinning vs. China Petrochemical Development | Tainan Spinning vs. Li Peng Enterprise | Tainan Spinning vs. Oriental Union Chemical |
| Kee Tai vs. Hung Sheng Construction | Kee Tai vs. Chainqui Construction Development | Kee Tai vs. BES Engineering Co | Kee Tai vs. Long Bon International |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |