Correlation Between Taiwan Glass and BES Engineering
Can any of the company-specific risk be diversified away by investing in both Taiwan Glass and BES Engineering 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 Glass and BES Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Taiwan Glass Ind and BES Engineering Co, you can compare the effects of market volatilities on Taiwan Glass and BES Engineering 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 Glass with a short position of BES Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taiwan Glass and BES Engineering.
Diversification Opportunities for Taiwan Glass and BES Engineering
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Taiwan and BES is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Taiwan Glass Ind and BES Engineering Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BES Engineering and Taiwan Glass 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 Glass Ind are associated (or correlated) with BES Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BES Engineering has no effect on the direction of Taiwan Glass i.e., Taiwan Glass and BES Engineering go up and down completely randomly.
Pair Corralation between Taiwan Glass and BES Engineering
Assuming the 90 days trading horizon Taiwan Glass Ind is expected to under-perform the BES Engineering. In addition to that, Taiwan Glass is 1.02 times more volatile than BES Engineering Co. It trades about 0.0 of its total potential returns per unit of risk. BES Engineering Co is currently generating about 0.04 per unit of volatility. If you would invest 832.00 in BES Engineering Co on August 26, 2024 and sell it today you would earn a total of 283.00 from holding BES Engineering Co or generate 34.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Taiwan Glass Ind vs. BES Engineering Co
Performance |
| Timeline |
| Taiwan Glass Ind |
| BES Engineering |
Taiwan Glass and BES Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taiwan Glass and BES Engineering
The main advantage of trading using opposite Taiwan Glass and BES Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taiwan Glass position performs unexpectedly, BES Engineering 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 BES Engineering will offset losses from the drop in BES Engineering's long position.| Taiwan Glass vs. Sunny Friend Environmental | Taiwan Glass vs. TTET Union Corp | Taiwan Glass vs. ECOVE Environment Corp | Taiwan Glass vs. Yulon Finance Corp |
| BES Engineering vs. Hung Sheng Construction | BES Engineering vs. Taiwan Glass Ind | BES Engineering vs. China Petrochemical Development | BES Engineering vs. Taiwan Tea 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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