Correlation Between Hong Ho and Taiwan Takisawa
Can any of the company-specific risk be diversified away by investing in both Hong Ho and Taiwan Takisawa 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 Hong Ho and Taiwan Takisawa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hong Ho Precision and Taiwan Takisawa Technology, you can compare the effects of market volatilities on Hong Ho and Taiwan Takisawa 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 Hong Ho with a short position of Taiwan Takisawa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hong Ho and Taiwan Takisawa.
Diversification Opportunities for Hong Ho and Taiwan Takisawa
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hong and Taiwan is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Hong Ho Precision and Taiwan Takisawa Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taiwan Takisawa Tech and Hong Ho 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 Hong Ho Precision are associated (or correlated) with Taiwan Takisawa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taiwan Takisawa Tech has no effect on the direction of Hong Ho i.e., Hong Ho and Taiwan Takisawa go up and down completely randomly.
Pair Corralation between Hong Ho and Taiwan Takisawa
Assuming the 90 days trading horizon Hong Ho is expected to generate 1.2 times less return on investment than Taiwan Takisawa. But when comparing it to its historical volatility, Hong Ho Precision is 1.74 times less risky than Taiwan Takisawa. It trades about 0.08 of its potential returns per unit of risk. Taiwan Takisawa Technology is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 7,590 in Taiwan Takisawa Technology on September 2, 2024 and sell it today you would earn a total of 720.00 from holding Taiwan Takisawa Technology or generate 9.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hong Ho Precision vs. Taiwan Takisawa Technology
Performance |
| Timeline |
| Hong Ho Precision |
| Taiwan Takisawa Tech |
Hong Ho and Taiwan Takisawa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hong Ho and Taiwan Takisawa
The main advantage of trading using opposite Hong Ho and Taiwan Takisawa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hong Ho position performs unexpectedly, Taiwan Takisawa 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 Takisawa will offset losses from the drop in Taiwan Takisawa's long position.| Hong Ho vs. Everest Textile Co | Hong Ho vs. Hong Yi Fiber | Hong Ho vs. Yi Jinn Industrial | Hong Ho vs. Carnival Industrial Corp |
| Taiwan Takisawa vs. TMP Steel | Taiwan Takisawa vs. Softstar Entertainment | Taiwan Takisawa vs. China Steel Corp | Taiwan Takisawa vs. Mayer Steel Pipe |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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