Correlation Between Ta Ya and UPC Technology
Can any of the company-specific risk be diversified away by investing in both Ta Ya and UPC Technology 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 Ta Ya and UPC Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ta Ya Electric and UPC Technology Corp, you can compare the effects of market volatilities on Ta Ya and UPC Technology 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 Ta Ya with a short position of UPC Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ta Ya and UPC Technology.
Diversification Opportunities for Ta Ya and UPC Technology
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 1609 and UPC is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Ta Ya Electric and UPC Technology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UPC Technology Corp and Ta Ya 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 Ta Ya Electric are associated (or correlated) with UPC Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UPC Technology Corp has no effect on the direction of Ta Ya i.e., Ta Ya and UPC Technology go up and down completely randomly.
Pair Corralation between Ta Ya and UPC Technology
Assuming the 90 days trading horizon Ta Ya Electric is expected to generate 1.6 times more return on investment than UPC Technology. However, Ta Ya is 1.6 times more volatile than UPC Technology Corp. It trades about 0.08 of its potential returns per unit of risk. UPC Technology Corp is currently generating about -0.03 per unit of risk. If you would invest 2,039 in Ta Ya Electric on September 3, 2024 and sell it today you would earn a total of 2,546 from holding Ta Ya Electric or generate 124.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.78% |
| Values | Daily Returns |
Ta Ya Electric vs. UPC Technology Corp
Performance |
| Timeline |
| Ta Ya Electric |
| UPC Technology Corp |
Ta Ya and UPC Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ta Ya and UPC Technology
The main advantage of trading using opposite Ta Ya and UPC Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ta Ya position performs unexpectedly, UPC Technology 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 UPC Technology will offset losses from the drop in UPC Technology's long position.| Ta Ya vs. Walsin Lihwa Corp | Ta Ya vs. Hua Eng Wire | Ta Ya vs. Hong Tai Electric | Ta Ya vs. Chung Hsin Electric Machinery |
| UPC Technology vs. USI Corp | UPC Technology vs. Taiwan Styrene Monomer | UPC Technology vs. Asia Polymer Corp | UPC Technology 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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