Correlation Between Taiwan Navigation and Chien Kuo
Can any of the company-specific risk be diversified away by investing in both Taiwan Navigation and Chien Kuo 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 Navigation and Chien Kuo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Taiwan Navigation Co and Chien Kuo Construction, you can compare the effects of market volatilities on Taiwan Navigation and Chien Kuo 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 Navigation with a short position of Chien Kuo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taiwan Navigation and Chien Kuo.
Diversification Opportunities for Taiwan Navigation and Chien Kuo
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Taiwan and Chien is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Taiwan Navigation Co and Chien Kuo Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chien Kuo Construction and Taiwan Navigation 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 Navigation Co are associated (or correlated) with Chien Kuo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chien Kuo Construction has no effect on the direction of Taiwan Navigation i.e., Taiwan Navigation and Chien Kuo go up and down completely randomly.
Pair Corralation between Taiwan Navigation and Chien Kuo
Assuming the 90 days trading horizon Taiwan Navigation is expected to generate 7.77 times less return on investment than Chien Kuo. But when comparing it to its historical volatility, Taiwan Navigation Co is 1.57 times less risky than Chien Kuo. It trades about 0.02 of its potential returns per unit of risk. Chien Kuo Construction is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,405 in Chien Kuo Construction on September 12, 2024 and sell it today you would earn a total of 1,350 from holding Chien Kuo Construction or generate 96.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Taiwan Navigation Co vs. Chien Kuo Construction
Performance |
| Timeline |
| Taiwan Navigation |
| Chien Kuo Construction |
Taiwan Navigation and Chien Kuo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taiwan Navigation and Chien Kuo
The main advantage of trading using opposite Taiwan Navigation and Chien Kuo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taiwan Navigation position performs unexpectedly, Chien Kuo 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 Chien Kuo will offset losses from the drop in Chien Kuo's long position.| Taiwan Navigation vs. Yang Ming Marine | Taiwan Navigation vs. Wan Hai Lines | Taiwan Navigation vs. U Ming Marine Transport | Taiwan Navigation vs. China Airlines |
| Chien Kuo vs. Yang Ming Marine | Chien Kuo vs. Wan Hai Lines | Chien Kuo vs. U Ming Marine Transport | Chien Kuo vs. Taiwan Navigation Co |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |