Correlation Between Nankang Rubber and Intai Technology
Can any of the company-specific risk be diversified away by investing in both Nankang Rubber and Intai 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 Nankang Rubber and Intai Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nankang Rubber Tire and Intai Technology, you can compare the effects of market volatilities on Nankang Rubber and Intai 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 Nankang Rubber with a short position of Intai Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nankang Rubber and Intai Technology.
Diversification Opportunities for Nankang Rubber and Intai Technology
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Nankang and Intai is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Nankang Rubber Tire and Intai Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intai Technology and Nankang Rubber 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 Nankang Rubber Tire are associated (or correlated) with Intai Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intai Technology has no effect on the direction of Nankang Rubber i.e., Nankang Rubber and Intai Technology go up and down completely randomly.
Pair Corralation between Nankang Rubber and Intai Technology
Assuming the 90 days trading horizon Nankang Rubber Tire is expected to under-perform the Intai Technology. In addition to that, Nankang Rubber is 2.59 times more volatile than Intai Technology. It trades about -0.2 of its total potential returns per unit of risk. Intai Technology is currently generating about 0.0 per unit of volatility. If you would invest 11,300 in Intai Technology on October 24, 2024 and sell it today you would earn a total of 0.00 from holding Intai Technology or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nankang Rubber Tire vs. Intai Technology
Performance |
| Timeline |
| Nankang Rubber Tire |
| Intai Technology |
Nankang Rubber and Intai Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nankang Rubber and Intai Technology
The main advantage of trading using opposite Nankang Rubber and Intai Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nankang Rubber position performs unexpectedly, Intai 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 Intai Technology will offset losses from the drop in Intai Technology's long position.| Nankang Rubber vs. Yulon Motor Co | Nankang Rubber vs. Federal Corp | Nankang Rubber vs. Kenda Rubber Industrial | Nankang Rubber vs. Taiwan Glass Ind |
| Intai Technology vs. Nankang Rubber Tire | Intai Technology vs. Ruentex Materials Co | Intai Technology vs. CHC Healthcare Group | Intai Technology vs. Power Wind Health |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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