Correlation Between Tainan Enterprises and Asia Plastic
Can any of the company-specific risk be diversified away by investing in both Tainan Enterprises and Asia Plastic 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 Enterprises and Asia Plastic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tainan Enterprises Co and Asia Plastic Recycling, you can compare the effects of market volatilities on Tainan Enterprises and Asia Plastic 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 Enterprises with a short position of Asia Plastic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tainan Enterprises and Asia Plastic.
Diversification Opportunities for Tainan Enterprises and Asia Plastic
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Tainan and Asia is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Tainan Enterprises Co and Asia Plastic Recycling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Plastic Recycling and Tainan Enterprises 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 Enterprises Co are associated (or correlated) with Asia Plastic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Plastic Recycling has no effect on the direction of Tainan Enterprises i.e., Tainan Enterprises and Asia Plastic go up and down completely randomly.
Pair Corralation between Tainan Enterprises and Asia Plastic
Assuming the 90 days trading horizon Tainan Enterprises Co is expected to under-perform the Asia Plastic. In addition to that, Tainan Enterprises is 1.68 times more volatile than Asia Plastic Recycling. It trades about -0.07 of its total potential returns per unit of risk. Asia Plastic Recycling is currently generating about -0.05 per unit of volatility. If you would invest 772.00 in Asia Plastic Recycling on September 1, 2024 and sell it today you would lose (80.00) from holding Asia Plastic Recycling or give up 10.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.22% |
| Values | Daily Returns |
Tainan Enterprises Co vs. Asia Plastic Recycling
Performance |
| Timeline |
| Tainan Enterprises |
| Asia Plastic Recycling |
Tainan Enterprises and Asia Plastic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tainan Enterprises and Asia Plastic
The main advantage of trading using opposite Tainan Enterprises and Asia Plastic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tainan Enterprises position performs unexpectedly, Asia Plastic 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 Asia Plastic will offset losses from the drop in Asia Plastic's long position.| Tainan Enterprises vs. Chaintech Technology Corp | Tainan Enterprises vs. AVerMedia Technologies | Tainan Enterprises vs. Avision | Tainan Enterprises vs. Clevo Co |
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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