Correlation Between Taiwan Fertilizer and Great Wall
Can any of the company-specific risk be diversified away by investing in both Taiwan Fertilizer and Great Wall 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 Taiwan Fertilizer and Great Wall into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Taiwan Fertilizer Co and Great Wall Enterprise, you can compare the effects of market volatilities on Taiwan Fertilizer and Great Wall 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 Taiwan Fertilizer with a short position of Great Wall. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taiwan Fertilizer and Great Wall.
Diversification Opportunities for Taiwan Fertilizer and Great Wall
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Taiwan and Great is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Taiwan Fertilizer Co and Great Wall Enterprise in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great Wall Enterprise and Taiwan Fertilizer 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 Taiwan Fertilizer Co are associated (or correlated) with Great Wall. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great Wall Enterprise has no effect on the direction of Taiwan Fertilizer i.e., Taiwan Fertilizer and Great Wall go up and down completely randomly.
Pair Corralation between Taiwan Fertilizer and Great Wall
Assuming the 90 days trading horizon Taiwan Fertilizer Co is expected to under-perform the Great Wall. In addition to that, Taiwan Fertilizer is 2.03 times more volatile than Great Wall Enterprise. It trades about -0.07 of its total potential returns per unit of risk. Great Wall Enterprise is currently generating about 0.31 per unit of volatility. If you would invest 5,120 in Great Wall Enterprise on September 1, 2024 and sell it today you would earn a total of 210.00 from holding Great Wall Enterprise or generate 4.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Taiwan Fertilizer Co vs. Great Wall Enterprise
Performance |
| Timeline |
| Taiwan Fertilizer |
| Great Wall Enterprise |
Taiwan Fertilizer and Great Wall Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taiwan Fertilizer and Great Wall
The main advantage of trading using opposite Taiwan Fertilizer and Great Wall positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taiwan Fertilizer position performs unexpectedly, Great Wall 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 Great Wall will offset losses from the drop in Great Wall's long position.| Taiwan Fertilizer vs. Taiwan Cement Corp | Taiwan Fertilizer vs. Far Eastern New | Taiwan Fertilizer vs. Asia Cement Corp | Taiwan Fertilizer vs. Formosa Plastics Corp |
| Great Wall vs. De Licacy Industrial | Great Wall vs. Wisher Industrial Co | Great Wall vs. Tainan Enterprises 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |