Correlation Between SYN Tech and Taiwan Cement
Can any of the company-specific risk be diversified away by investing in both SYN Tech and Taiwan Cement 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 SYN Tech and Taiwan Cement into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SYN Tech Chem Pharm and Taiwan Cement Corp, you can compare the effects of market volatilities on SYN Tech and Taiwan Cement 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 SYN Tech with a short position of Taiwan Cement. Check out your portfolio center. Please also check ongoing floating volatility patterns of SYN Tech and Taiwan Cement.
Diversification Opportunities for SYN Tech and Taiwan Cement
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SYN and Taiwan is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding SYN Tech Chem Pharm and Taiwan Cement Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taiwan Cement Corp and SYN Tech 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 SYN Tech Chem Pharm are associated (or correlated) with Taiwan Cement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taiwan Cement Corp has no effect on the direction of SYN Tech i.e., SYN Tech and Taiwan Cement go up and down completely randomly.
Pair Corralation between SYN Tech and Taiwan Cement
Assuming the 90 days trading horizon SYN Tech Chem Pharm is expected to generate 1.13 times more return on investment than Taiwan Cement. However, SYN Tech is 1.13 times more volatile than Taiwan Cement Corp. It trades about 0.03 of its potential returns per unit of risk. Taiwan Cement Corp is currently generating about -0.02 per unit of risk. If you would invest 8,298 in SYN Tech Chem Pharm on November 19, 2024 and sell it today you would earn a total of 1,332 from holding SYN Tech Chem Pharm or generate 16.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SYN Tech Chem Pharm vs. Taiwan Cement Corp
Performance |
| Timeline |
| SYN Tech Chem |
| Taiwan Cement Corp |
SYN Tech and Taiwan Cement Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SYN Tech and Taiwan Cement
The main advantage of trading using opposite SYN Tech and Taiwan Cement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SYN Tech position performs unexpectedly, Taiwan Cement 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 Taiwan Cement will offset losses from the drop in Taiwan Cement's long position.| SYN Tech vs. C Media Electronics | SYN Tech vs. SuperAlloy Industrial Co, | SYN Tech vs. Orient Semiconductor Electronics | SYN Tech vs. Taiwan Chinsan Electronic |
| Taiwan Cement vs. Asia Cement Corp | Taiwan Cement vs. Formosa Plastics Corp | Taiwan Cement vs. Nan Ya Plastics | Taiwan Cement vs. China Steel 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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