Correlation Between FocalTech Systems and Taiwan Cement
Can any of the company-specific risk be diversified away by investing in both FocalTech Systems and Taiwan Cement 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 FocalTech Systems and Taiwan Cement into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FocalTech Systems Co and Taiwan Cement Corp, you can compare the effects of market volatilities on FocalTech Systems and Taiwan Cement 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 FocalTech Systems with a short position of Taiwan Cement. Check out your portfolio center. Please also check ongoing floating volatility patterns of FocalTech Systems and Taiwan Cement.
Diversification Opportunities for FocalTech Systems and Taiwan Cement
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FocalTech and Taiwan is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding FocalTech Systems Co and Taiwan Cement Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taiwan Cement Corp and FocalTech Systems 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 FocalTech Systems Co are associated (or correlated) with Taiwan Cement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taiwan Cement Corp has no effect on the direction of FocalTech Systems i.e., FocalTech Systems and Taiwan Cement go up and down completely randomly.
Pair Corralation between FocalTech Systems and Taiwan Cement
Assuming the 90 days trading horizon FocalTech Systems Co is expected to generate 16.23 times more return on investment than Taiwan Cement. However, FocalTech Systems is 16.23 times more volatile than Taiwan Cement Corp. It trades about 0.0 of its potential returns per unit of risk. Taiwan Cement Corp is currently generating about 0.0 per unit of risk. If you would invest 8,990 in FocalTech Systems Co on September 1, 2024 and sell it today you would lose (200.00) from holding FocalTech Systems Co or give up 2.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FocalTech Systems Co vs. Taiwan Cement Corp
Performance |
| Timeline |
| FocalTech Systems |
| Taiwan Cement Corp |
FocalTech Systems and Taiwan Cement Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FocalTech Systems and Taiwan Cement
The main advantage of trading using opposite FocalTech Systems and Taiwan Cement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FocalTech Systems position performs unexpectedly, Taiwan Cement 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 Cement will offset losses from the drop in Taiwan Cement's long position.| FocalTech Systems vs. Novatek Microelectronics Corp | FocalTech Systems vs. Sitronix Technology Corp | FocalTech Systems vs. Elan Microelectronics Corp | FocalTech Systems vs. Global Unichip Corp |
| Taiwan Cement vs. LandMark Optoelectronics | Taiwan Cement vs. FDC International Hotels | Taiwan Cement vs. Microelectronics Technology | Taiwan Cement vs. Voltronic Power Technology |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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