Correlation Between TECO Electric and Taita Chemical
Can any of the company-specific risk be diversified away by investing in both TECO Electric and Taita Chemical 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 TECO Electric and Taita Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TECO Electric Machinery and Taita Chemical Co, you can compare the effects of market volatilities on TECO Electric and Taita Chemical 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 TECO Electric with a short position of Taita Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of TECO Electric and Taita Chemical.
Diversification Opportunities for TECO Electric and Taita Chemical
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between TECO and Taita is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding TECO Electric Machinery and Taita Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taita Chemical and TECO Electric 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 TECO Electric Machinery are associated (or correlated) with Taita Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taita Chemical has no effect on the direction of TECO Electric i.e., TECO Electric and Taita Chemical go up and down completely randomly.
Pair Corralation between TECO Electric and Taita Chemical
Assuming the 90 days trading horizon TECO Electric Machinery is expected to under-perform the Taita Chemical. But the stock apears to be less risky and, when comparing its historical volatility, TECO Electric Machinery is 1.57 times less risky than Taita Chemical. The stock trades about 0.0 of its potential returns per unit of risk. The Taita Chemical Co is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 1,320 in Taita Chemical Co on December 1, 2024 and sell it today you would earn a total of 110.00 from holding Taita Chemical Co or generate 8.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TECO Electric Machinery vs. Taita Chemical Co
Performance |
| Timeline |
| TECO Electric Machinery |
| Taita Chemical |
TECO Electric and Taita Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TECO Electric and Taita Chemical
The main advantage of trading using opposite TECO Electric and Taita Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TECO Electric position performs unexpectedly, Taita Chemical 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 Taita Chemical will offset losses from the drop in Taita Chemical's long position.| TECO Electric vs. Walsin Lihwa Corp | TECO Electric vs. Far Eastern New | TECO Electric vs. Nan Ya Plastics | TECO Electric vs. Taiwan Cement Corp |
| Taita Chemical vs. China General Plastics | Taita Chemical vs. Asia Polymer Corp | Taita Chemical vs. USI Corp | Taita Chemical vs. Grand Pacific Petrochemical |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |