Correlation Between Taichung Commercial and Addcn Technology
Can any of the company-specific risk be diversified away by investing in both Taichung Commercial and Addcn Technology 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 Taichung Commercial and Addcn Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Taichung Commercial Bank and Addcn Technology Co, you can compare the effects of market volatilities on Taichung Commercial and Addcn Technology 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 Taichung Commercial with a short position of Addcn Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taichung Commercial and Addcn Technology.
Diversification Opportunities for Taichung Commercial and Addcn Technology
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Taichung and Addcn is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Taichung Commercial Bank and Addcn Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Addcn Technology and Taichung Commercial 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 Taichung Commercial Bank are associated (or correlated) with Addcn Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Addcn Technology has no effect on the direction of Taichung Commercial i.e., Taichung Commercial and Addcn Technology go up and down completely randomly.
Pair Corralation between Taichung Commercial and Addcn Technology
Assuming the 90 days trading horizon Taichung Commercial Bank is expected to generate 1.09 times more return on investment than Addcn Technology. However, Taichung Commercial is 1.09 times more volatile than Addcn Technology Co. It trades about 0.07 of its potential returns per unit of risk. Addcn Technology Co is currently generating about -0.12 per unit of risk. If you would invest 1,800 in Taichung Commercial Bank on August 25, 2024 and sell it today you would earn a total of 15.00 from holding Taichung Commercial Bank or generate 0.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Taichung Commercial Bank vs. Addcn Technology Co
Performance |
| Timeline |
| Taichung Commercial Bank |
| Addcn Technology |
Taichung Commercial and Addcn Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taichung Commercial and Addcn Technology
The main advantage of trading using opposite Taichung Commercial and Addcn Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taichung Commercial position performs unexpectedly, Addcn Technology 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 Addcn Technology will offset losses from the drop in Addcn Technology's long position.| Taichung Commercial vs. Taiwan Business Bank | Taichung Commercial vs. Taishin Financial Holding | Taichung Commercial vs. Hua Nan Financial | Taichung Commercial vs. ESUN Financial Holding |
| Addcn Technology vs. Century Iron And | Addcn Technology vs. Yieh United Steel | Addcn Technology vs. China Development Financial | Addcn Technology vs. Taichung Commercial Bank |
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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