Correlation Between Kee Tai and Taiwan High
Can any of the company-specific risk be diversified away by investing in both Kee Tai and Taiwan High 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 Kee Tai and Taiwan High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kee Tai Properties and Taiwan High Speed, you can compare the effects of market volatilities on Kee Tai and Taiwan High 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 Kee Tai with a short position of Taiwan High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kee Tai and Taiwan High.
Diversification Opportunities for Kee Tai and Taiwan High
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kee and Taiwan is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Kee Tai Properties and Taiwan High Speed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taiwan High Speed and Kee Tai 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 Kee Tai Properties are associated (or correlated) with Taiwan High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taiwan High Speed has no effect on the direction of Kee Tai i.e., Kee Tai and Taiwan High go up and down completely randomly.
Pair Corralation between Kee Tai and Taiwan High
Assuming the 90 days trading horizon Kee Tai Properties is expected to under-perform the Taiwan High. In addition to that, Kee Tai is 2.98 times more volatile than Taiwan High Speed. It trades about -0.06 of its total potential returns per unit of risk. Taiwan High Speed is currently generating about -0.05 per unit of volatility. If you would invest 2,980 in Taiwan High Speed on September 2, 2024 and sell it today you would lose (155.00) from holding Taiwan High Speed or give up 5.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kee Tai Properties vs. Taiwan High Speed
Performance |
| Timeline |
| Kee Tai Properties |
| Taiwan High Speed |
Kee Tai and Taiwan High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kee Tai and Taiwan High
The main advantage of trading using opposite Kee Tai and Taiwan High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kee Tai position performs unexpectedly, Taiwan High 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 High will offset losses from the drop in Taiwan High's long position.| Kee Tai vs. Ruentex Development Co | Kee Tai vs. CTCI Corp | Kee Tai vs. Information Technology Total | Kee Tai vs. Ennoconn Corp |
| Taiwan High vs. Chunghwa Telecom Co | Taiwan High vs. ESUN Financial Holding | Taiwan High vs. Mega Financial Holding | Taiwan High vs. Taiwan Cement 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 CEOs Directory module to screen CEOs from public companies around the world.
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