Correlation Between TECO Electric and Walsin Lihwa
Can any of the company-specific risk be diversified away by investing in both TECO Electric and Walsin Lihwa 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 Walsin Lihwa 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 Walsin Lihwa Corp, you can compare the effects of market volatilities on TECO Electric and Walsin Lihwa 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 Walsin Lihwa. Check out your portfolio center. Please also check ongoing floating volatility patterns of TECO Electric and Walsin Lihwa.
Diversification Opportunities for TECO Electric and Walsin Lihwa
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between TECO and Walsin is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding TECO Electric Machinery and Walsin Lihwa Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walsin Lihwa Corp 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 Walsin Lihwa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walsin Lihwa Corp has no effect on the direction of TECO Electric i.e., TECO Electric and Walsin Lihwa go up and down completely randomly.
Pair Corralation between TECO Electric and Walsin Lihwa
Assuming the 90 days trading horizon TECO Electric Machinery is expected to generate 0.88 times more return on investment than Walsin Lihwa. However, TECO Electric Machinery is 1.13 times less risky than Walsin Lihwa. It trades about 0.06 of its potential returns per unit of risk. Walsin Lihwa Corp is currently generating about -0.01 per unit of risk. If you would invest 5,270 in TECO Electric Machinery on October 25, 2024 and sell it today you would earn a total of 90.00 from holding TECO Electric Machinery or generate 1.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TECO Electric Machinery vs. Walsin Lihwa Corp
Performance |
| Timeline |
| TECO Electric Machinery |
| Walsin Lihwa Corp |
TECO Electric and Walsin Lihwa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TECO Electric and Walsin Lihwa
The main advantage of trading using opposite TECO Electric and Walsin Lihwa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TECO Electric position performs unexpectedly, Walsin Lihwa 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 Walsin Lihwa will offset losses from the drop in Walsin Lihwa'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 |
| Walsin Lihwa vs. TECO Electric Machinery | Walsin Lihwa vs. Far Eastern New | Walsin Lihwa vs. Nan Ya Plastics | Walsin Lihwa vs. Winbond Electronics 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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |