Correlation Between Tainan Spinning and Launch Technologies
Can any of the company-specific risk be diversified away by investing in both Tainan Spinning and Launch Technologies 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 Launch Technologies 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 Launch Technologies Co, you can compare the effects of market volatilities on Tainan Spinning and Launch Technologies 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 Launch Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tainan Spinning and Launch Technologies.
Diversification Opportunities for Tainan Spinning and Launch Technologies
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Tainan and Launch is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Tainan Spinning Co and Launch Technologies Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Launch Technologies 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 Launch Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Launch Technologies has no effect on the direction of Tainan Spinning i.e., Tainan Spinning and Launch Technologies go up and down completely randomly.
Pair Corralation between Tainan Spinning and Launch Technologies
Assuming the 90 days trading horizon Tainan Spinning Co is expected to generate 1.67 times more return on investment than Launch Technologies. However, Tainan Spinning is 1.67 times more volatile than Launch Technologies Co. It trades about -0.12 of its potential returns per unit of risk. Launch Technologies Co is currently generating about -0.37 per unit of risk. If you would invest 1,545 in Tainan Spinning Co on September 4, 2024 and sell it today you would lose (30.00) from holding Tainan Spinning Co or give up 1.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
Tainan Spinning Co vs. Launch Technologies Co
Performance |
| Timeline |
| Tainan Spinning |
| Launch Technologies |
Tainan Spinning and Launch Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tainan Spinning and Launch Technologies
The main advantage of trading using opposite Tainan Spinning and Launch Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tainan Spinning position performs unexpectedly, Launch Technologies 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 Launch Technologies will offset losses from the drop in Launch Technologies' 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 |
| Launch Technologies vs. Chien Kuo Construction | Launch Technologies vs. WINSON Machinery Co | Launch Technologies vs. X Legend Entertainment Co | Launch Technologies vs. Pacific Construction Co |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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