Correlation Between Taiwan IC and Excelsior Medical
Can any of the company-specific risk be diversified away by investing in both Taiwan IC and Excelsior Medical 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 IC and Excelsior Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Taiwan IC Packaging and Excelsior Medical Co, you can compare the effects of market volatilities on Taiwan IC and Excelsior Medical 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 IC with a short position of Excelsior Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taiwan IC and Excelsior Medical.
Diversification Opportunities for Taiwan IC and Excelsior Medical
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Taiwan and Excelsior is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Taiwan IC Packaging and Excelsior Medical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Excelsior Medical and Taiwan IC 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 IC Packaging are associated (or correlated) with Excelsior Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Excelsior Medical has no effect on the direction of Taiwan IC i.e., Taiwan IC and Excelsior Medical go up and down completely randomly.
Pair Corralation between Taiwan IC and Excelsior Medical
Assuming the 90 days trading horizon Taiwan IC Packaging is expected to generate 2.43 times more return on investment than Excelsior Medical. However, Taiwan IC is 2.43 times more volatile than Excelsior Medical Co. It trades about 0.04 of its potential returns per unit of risk. Excelsior Medical Co is currently generating about 0.05 per unit of risk. If you would invest 1,115 in Taiwan IC Packaging on September 3, 2024 and sell it today you would earn a total of 485.00 from holding Taiwan IC Packaging or generate 43.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Taiwan IC Packaging vs. Excelsior Medical Co
Performance |
| Timeline |
| Taiwan IC Packaging |
| Excelsior Medical |
Taiwan IC and Excelsior Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taiwan IC and Excelsior Medical
The main advantage of trading using opposite Taiwan IC and Excelsior Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taiwan IC position performs unexpectedly, Excelsior Medical 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 Excelsior Medical will offset losses from the drop in Excelsior Medical's long position.| Taiwan IC vs. Taiwan Cooperative Financial | Taiwan IC vs. PChome Online | Taiwan IC vs. Cleanaway Co | Taiwan IC vs. Central Reinsurance Corp |
| Excelsior Medical vs. Sinphar Pharmaceutical Co | Excelsior Medical vs. WiseChip Semiconductor | Excelsior Medical vs. Novatek Microelectronics Corp | Excelsior Medical vs. Leader Electronics |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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