Correlation Between Ta Ya and Amtran Technology
Can any of the company-specific risk be diversified away by investing in both Ta Ya and Amtran 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 Amtran 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 Amtran Technology Co, you can compare the effects of market volatilities on Ta Ya and Amtran 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 Amtran Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ta Ya and Amtran Technology.
Diversification Opportunities for Ta Ya and Amtran Technology
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 1609 and Amtran is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Ta Ya Electric and Amtran Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amtran Technology 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 Amtran Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amtran Technology has no effect on the direction of Ta Ya i.e., Ta Ya and Amtran Technology go up and down completely randomly.
Pair Corralation between Ta Ya and Amtran Technology
Assuming the 90 days trading horizon Ta Ya Electric is expected to generate 0.92 times more return on investment than Amtran Technology. However, Ta Ya Electric is 1.09 times less risky than Amtran Technology. It trades about 0.01 of its potential returns per unit of risk. Amtran Technology Co is currently generating about -0.27 per unit of risk. If you would invest 4,640 in Ta Ya Electric on August 26, 2024 and sell it today you would earn a total of 5.00 from holding Ta Ya Electric or generate 0.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ta Ya Electric vs. Amtran Technology Co
Performance |
| Timeline |
| Ta Ya Electric |
| Amtran Technology |
Ta Ya and Amtran Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ta Ya and Amtran Technology
The main advantage of trading using opposite Ta Ya and Amtran Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ta Ya position performs unexpectedly, Amtran 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 Amtran Technology will offset losses from the drop in Amtran Technology's long position.| Ta Ya vs. Sunny Friend Environmental | Ta Ya vs. TTET Union Corp | Ta Ya vs. ECOVE Environment Corp | Ta Ya vs. Yulon Finance Corp |
| Amtran Technology vs. Taiwan Semiconductor Manufacturing | Amtran Technology vs. Hon Hai Precision | Amtran Technology vs. MediaTek | Amtran Technology vs. Chunghwa Telecom Co |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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