Correlation Between Taisol Electronics and C Media
Can any of the company-specific risk be diversified away by investing in both Taisol Electronics and C Media 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 Taisol Electronics and C Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Taisol Electronics Co and C Media Electronics, you can compare the effects of market volatilities on Taisol Electronics and C Media 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 Taisol Electronics with a short position of C Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taisol Electronics and C Media.
Diversification Opportunities for Taisol Electronics and C Media
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Taisol and 6237 is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Taisol Electronics Co and C Media Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on C Media Electronics and Taisol Electronics 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 Taisol Electronics Co are associated (or correlated) with C Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of C Media Electronics has no effect on the direction of Taisol Electronics i.e., Taisol Electronics and C Media go up and down completely randomly.
Pair Corralation between Taisol Electronics and C Media
Assuming the 90 days trading horizon Taisol Electronics is expected to generate 1.36 times less return on investment than C Media. But when comparing it to its historical volatility, Taisol Electronics Co is 2.11 times less risky than C Media. It trades about 0.26 of its potential returns per unit of risk. C Media Electronics is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 5,180 in C Media Electronics on November 29, 2024 and sell it today you would earn a total of 420.00 from holding C Media Electronics or generate 8.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Taisol Electronics Co vs. C Media Electronics
Performance |
| Timeline |
| Taisol Electronics |
| C Media Electronics |
Taisol Electronics and C Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taisol Electronics and C Media
The main advantage of trading using opposite Taisol Electronics and C Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taisol Electronics position performs unexpectedly, C Media 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 C Media will offset losses from the drop in C Media's long position.| Taisol Electronics vs. ITEQ Corp | Taisol Electronics vs. Jentech Precision Industrial | Taisol Electronics vs. Auras Technology Co | Taisol Electronics vs. Chaun Choung Technology Corp |
| C Media vs. Evergreen International Storage | C Media vs. Transcend Information | C Media vs. PChome Online | C Media vs. Advanced Wireless Semiconductor |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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