Correlation Between Taiwan Navigation and I Sheng
Can any of the company-specific risk be diversified away by investing in both Taiwan Navigation and I Sheng 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 I Sheng 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 I Sheng Electric Wire, you can compare the effects of market volatilities on Taiwan Navigation and I Sheng 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 I Sheng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taiwan Navigation and I Sheng.
Diversification Opportunities for Taiwan Navigation and I Sheng
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Taiwan and 6115 is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Taiwan Navigation Co and I Sheng Electric Wire in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on I Sheng Electric 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 I Sheng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of I Sheng Electric has no effect on the direction of Taiwan Navigation i.e., Taiwan Navigation and I Sheng go up and down completely randomly.
Pair Corralation between Taiwan Navigation and I Sheng
Assuming the 90 days trading horizon Taiwan Navigation Co is expected to under-perform the I Sheng. In addition to that, Taiwan Navigation is 2.33 times more volatile than I Sheng Electric Wire. It trades about -0.09 of its total potential returns per unit of risk. I Sheng Electric Wire is currently generating about -0.03 per unit of volatility. If you would invest 5,260 in I Sheng Electric Wire on September 13, 2024 and sell it today you would lose (30.00) from holding I Sheng Electric Wire or give up 0.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Taiwan Navigation Co vs. I Sheng Electric Wire
Performance |
| Timeline |
| Taiwan Navigation |
| I Sheng Electric |
Taiwan Navigation and I Sheng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taiwan Navigation and I Sheng
The main advantage of trading using opposite Taiwan Navigation and I Sheng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taiwan Navigation position performs unexpectedly, I Sheng 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 I Sheng will offset losses from the drop in I Sheng'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 |
| I Sheng vs. Yang Ming Marine | I Sheng vs. Wan Hai Lines | I Sheng vs. U Ming Marine Transport | I Sheng 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |