Correlation Between De Licacy and Ta Jiang
Can any of the company-specific risk be diversified away by investing in both De Licacy and Ta Jiang 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 De Licacy and Ta Jiang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between De Licacy Industrial and Ta Jiang Co, you can compare the effects of market volatilities on De Licacy and Ta Jiang 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 De Licacy with a short position of Ta Jiang. Check out your portfolio center. Please also check ongoing floating volatility patterns of De Licacy and Ta Jiang.
Diversification Opportunities for De Licacy and Ta Jiang
Pay attention - limited upside
The 3 months correlation between 1464 and 1453 is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding De Licacy Industrial and Ta Jiang Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ta Jiang and De Licacy 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 De Licacy Industrial are associated (or correlated) with Ta Jiang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ta Jiang has no effect on the direction of De Licacy i.e., De Licacy and Ta Jiang go up and down completely randomly.
Pair Corralation between De Licacy and Ta Jiang
Assuming the 90 days trading horizon De Licacy Industrial is expected to generate 1.25 times more return on investment than Ta Jiang. However, De Licacy is 1.25 times more volatile than Ta Jiang Co. It trades about 0.12 of its potential returns per unit of risk. Ta Jiang Co is currently generating about -0.21 per unit of risk. If you would invest 1,330 in De Licacy Industrial on September 3, 2024 and sell it today you would earn a total of 225.00 from holding De Licacy Industrial or generate 16.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
De Licacy Industrial vs. Ta Jiang Co
Performance |
| Timeline |
| De Licacy Industrial |
| Ta Jiang |
De Licacy and Ta Jiang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with De Licacy and Ta Jiang
The main advantage of trading using opposite De Licacy and Ta Jiang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if De Licacy position performs unexpectedly, Ta Jiang 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 Ta Jiang will offset losses from the drop in Ta Jiang's long position.| De Licacy vs. Tainan Spinning Co | De Licacy vs. Chia Her Industrial | De Licacy vs. WiseChip Semiconductor | De Licacy vs. Novatek Microelectronics Corp |
| Ta Jiang vs. Tainan Spinning Co | Ta Jiang vs. Chia Her Industrial | Ta Jiang vs. WiseChip Semiconductor | Ta Jiang vs. Novatek Microelectronics Corp |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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