Correlation Between Ichia Technologies and Taiwan Taomee
Can any of the company-specific risk be diversified away by investing in both Ichia Technologies and Taiwan Taomee 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 Ichia Technologies and Taiwan Taomee into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ichia Technologies and Taiwan Taomee Co, you can compare the effects of market volatilities on Ichia Technologies and Taiwan Taomee 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 Ichia Technologies with a short position of Taiwan Taomee. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ichia Technologies and Taiwan Taomee.
Diversification Opportunities for Ichia Technologies and Taiwan Taomee
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ichia and Taiwan is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Ichia Technologies and Taiwan Taomee Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taiwan Taomee and Ichia Technologies 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 Ichia Technologies are associated (or correlated) with Taiwan Taomee. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taiwan Taomee has no effect on the direction of Ichia Technologies i.e., Ichia Technologies and Taiwan Taomee go up and down completely randomly.
Pair Corralation between Ichia Technologies and Taiwan Taomee
Assuming the 90 days trading horizon Ichia Technologies is expected to generate 1.85 times more return on investment than Taiwan Taomee. However, Ichia Technologies is 1.85 times more volatile than Taiwan Taomee Co. It trades about 0.05 of its potential returns per unit of risk. Taiwan Taomee Co is currently generating about -0.16 per unit of risk. If you would invest 4,030 in Ichia Technologies on September 4, 2024 and sell it today you would earn a total of 60.00 from holding Ichia Technologies or generate 1.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Ichia Technologies vs. Taiwan Taomee Co
Performance |
| Timeline |
| Ichia Technologies |
| Taiwan Taomee |
Ichia Technologies and Taiwan Taomee Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ichia Technologies and Taiwan Taomee
The main advantage of trading using opposite Ichia Technologies and Taiwan Taomee positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ichia Technologies position performs unexpectedly, Taiwan Taomee 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 Taomee will offset losses from the drop in Taiwan Taomee's long position.| Ichia Technologies vs. Taiwan Semiconductor Manufacturing | Ichia Technologies vs. Yang Ming Marine | Ichia Technologies vs. AU Optronics | Ichia Technologies vs. Nan Ya Plastics |
| Taiwan Taomee vs. Ichia Technologies | Taiwan Taomee vs. LandMark Optoelectronics | Taiwan Taomee vs. STL Technology Co | Taiwan Taomee vs. Lien Chang Electronic |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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