Correlation Between Integrated Service and Taiwan Chinsan
Can any of the company-specific risk be diversified away by investing in both Integrated Service and Taiwan Chinsan 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 Integrated Service and Taiwan Chinsan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Integrated Service Technology and Taiwan Chinsan Electronic, you can compare the effects of market volatilities on Integrated Service and Taiwan Chinsan 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 Integrated Service with a short position of Taiwan Chinsan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Integrated Service and Taiwan Chinsan.
Diversification Opportunities for Integrated Service and Taiwan Chinsan
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Integrated and Taiwan is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Integrated Service Technology and Taiwan Chinsan Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taiwan Chinsan Electronic and Integrated Service 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 Integrated Service Technology are associated (or correlated) with Taiwan Chinsan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taiwan Chinsan Electronic has no effect on the direction of Integrated Service i.e., Integrated Service and Taiwan Chinsan go up and down completely randomly.
Pair Corralation between Integrated Service and Taiwan Chinsan
Assuming the 90 days trading horizon Integrated Service Technology is expected to under-perform the Taiwan Chinsan. In addition to that, Integrated Service is 1.08 times more volatile than Taiwan Chinsan Electronic. It trades about -0.11 of its total potential returns per unit of risk. Taiwan Chinsan Electronic is currently generating about 0.15 per unit of volatility. If you would invest 3,495 in Taiwan Chinsan Electronic on August 30, 2024 and sell it today you would earn a total of 550.00 from holding Taiwan Chinsan Electronic or generate 15.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Integrated Service Technology vs. Taiwan Chinsan Electronic
Performance |
| Timeline |
| Integrated Service |
| Taiwan Chinsan Electronic |
Integrated Service and Taiwan Chinsan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Integrated Service and Taiwan Chinsan
The main advantage of trading using opposite Integrated Service and Taiwan Chinsan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Integrated Service position performs unexpectedly, Taiwan Chinsan 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 Chinsan will offset losses from the drop in Taiwan Chinsan's long position.| Integrated Service vs. Taiwan Semiconductor Manufacturing | Integrated Service vs. MediaTek | Integrated Service vs. United Microelectronics | Integrated Service vs. Novatek Microelectronics Corp |
| Taiwan Chinsan vs. Microtips Technology | Taiwan Chinsan vs. Integrated Service Technology | Taiwan Chinsan vs. Daxin Materials Corp | Taiwan Chinsan vs. Elite Material 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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