Correlation Between Transcend Information and K Way
Can any of the company-specific risk be diversified away by investing in both Transcend Information and K Way 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 Transcend Information and K Way into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transcend Information and K Way Information, you can compare the effects of market volatilities on Transcend Information and K Way 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 Transcend Information with a short position of K Way. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transcend Information and K Way.
Diversification Opportunities for Transcend Information and K Way
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Transcend and 5201 is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Transcend Information and K Way Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on K Way Information and Transcend Information 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 Transcend Information are associated (or correlated) with K Way. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of K Way Information has no effect on the direction of Transcend Information i.e., Transcend Information and K Way go up and down completely randomly.
Pair Corralation between Transcend Information and K Way
Assuming the 90 days trading horizon Transcend Information is expected to under-perform the K Way. In addition to that, Transcend Information is 1.08 times more volatile than K Way Information. It trades about -0.1 of its total potential returns per unit of risk. K Way Information is currently generating about -0.06 per unit of volatility. If you would invest 2,835 in K Way Information on September 5, 2024 and sell it today you would lose (145.00) from holding K Way Information or give up 5.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Transcend Information vs. K Way Information
Performance |
| Timeline |
| Transcend Information |
| K Way Information |
Transcend Information and K Way Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transcend Information and K Way
The main advantage of trading using opposite Transcend Information and K Way positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transcend Information position performs unexpectedly, K Way 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 K Way will offset losses from the drop in K Way's long position.| Transcend Information vs. Taiwan Semiconductor Manufacturing | Transcend Information vs. Yang Ming Marine | Transcend Information vs. AU Optronics | Transcend Information vs. Nan Ya Plastics |
| K Way vs. YuantaP shares Taiwan Mid Cap | K Way vs. YuantaP shares Taiwan Electronics | K Way vs. YuantaP shares Taiwan Top | K Way vs. Fubon MSCI Taiwan |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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