Correlation Between De Licacy and Taichung Commercial
Can any of the company-specific risk be diversified away by investing in both De Licacy and Taichung Commercial 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 Taichung Commercial 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 Taichung Commercial Bank, you can compare the effects of market volatilities on De Licacy and Taichung Commercial 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 Taichung Commercial. Check out your portfolio center. Please also check ongoing floating volatility patterns of De Licacy and Taichung Commercial.
Diversification Opportunities for De Licacy and Taichung Commercial
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between 1464 and Taichung is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding De Licacy Industrial and Taichung Commercial Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taichung Commercial Bank 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 Taichung Commercial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taichung Commercial Bank has no effect on the direction of De Licacy i.e., De Licacy and Taichung Commercial go up and down completely randomly.
Pair Corralation between De Licacy and Taichung Commercial
Assuming the 90 days trading horizon De Licacy is expected to generate 7.32 times less return on investment than Taichung Commercial. In addition to that, De Licacy is 3.15 times more volatile than Taichung Commercial Bank. It trades about 0.01 of its total potential returns per unit of risk. Taichung Commercial Bank is currently generating about 0.22 per unit of volatility. If you would invest 1,785 in Taichung Commercial Bank on September 4, 2024 and sell it today you would earn a total of 80.00 from holding Taichung Commercial Bank or generate 4.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
De Licacy Industrial vs. Taichung Commercial Bank
Performance |
| Timeline |
| De Licacy Industrial |
| Taichung Commercial Bank |
De Licacy and Taichung Commercial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with De Licacy and Taichung Commercial
The main advantage of trading using opposite De Licacy and Taichung Commercial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if De Licacy position performs unexpectedly, Taichung Commercial 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 Taichung Commercial will offset losses from the drop in Taichung Commercial's long position.| De Licacy vs. Tainan Enterprises Co | De Licacy vs. Nien Hsing Textile | De Licacy vs. Wisher Industrial Co | De Licacy vs. Tex Ray Industrial Co |
| Taichung Commercial vs. Central Reinsurance Corp | Taichung Commercial vs. Huaku Development Co | Taichung Commercial vs. Chailease Holding Co | Taichung Commercial vs. CTBC 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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