Correlation Between Vivotek and Nan Ya
Can any of the company-specific risk be diversified away by investing in both Vivotek and Nan Ya 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 Vivotek and Nan Ya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vivotek and Nan Ya Plastics, you can compare the effects of market volatilities on Vivotek and Nan Ya 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 Vivotek with a short position of Nan Ya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vivotek and Nan Ya.
Diversification Opportunities for Vivotek and Nan Ya
Good diversification
The 3 months correlation between Vivotek and Nan is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Vivotek and Nan Ya Plastics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nan Ya Plastics and Vivotek 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 Vivotek are associated (or correlated) with Nan Ya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nan Ya Plastics has no effect on the direction of Vivotek i.e., Vivotek and Nan Ya go up and down completely randomly.
Pair Corralation between Vivotek and Nan Ya
Assuming the 90 days trading horizon Vivotek is expected to generate 1.88 times more return on investment than Nan Ya. However, Vivotek is 1.88 times more volatile than Nan Ya Plastics. It trades about -0.03 of its potential returns per unit of risk. Nan Ya Plastics is currently generating about -0.09 per unit of risk. If you would invest 21,232 in Vivotek on September 4, 2024 and sell it today you would lose (8,632) from holding Vivotek or give up 40.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Vivotek vs. Nan Ya Plastics
Performance |
| Timeline |
| Vivotek |
| Nan Ya Plastics |
Vivotek and Nan Ya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vivotek and Nan Ya
The main advantage of trading using opposite Vivotek and Nan Ya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vivotek position performs unexpectedly, Nan Ya 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 Nan Ya will offset losses from the drop in Nan Ya's long position.| Vivotek vs. Taiwan Semiconductor Manufacturing | Vivotek vs. Yang Ming Marine | Vivotek vs. AU Optronics | Vivotek vs. Nan Ya Plastics |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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