Correlation Between Continental Holdings and Ta Ya
Can any of the company-specific risk be diversified away by investing in both Continental Holdings and Ta 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 Continental Holdings and Ta Ya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Continental Holdings Corp and Ta Ya Electric, you can compare the effects of market volatilities on Continental Holdings and Ta 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 Continental Holdings with a short position of Ta Ya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Continental Holdings and Ta Ya.
Diversification Opportunities for Continental Holdings and Ta Ya
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Continental and 1609 is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Continental Holdings Corp and Ta Ya Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ta Ya Electric and Continental Holdings 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 Continental Holdings Corp are associated (or correlated) with Ta Ya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ta Ya Electric has no effect on the direction of Continental Holdings i.e., Continental Holdings and Ta Ya go up and down completely randomly.
Pair Corralation between Continental Holdings and Ta Ya
Assuming the 90 days trading horizon Continental Holdings is expected to generate 10.44 times less return on investment than Ta Ya. But when comparing it to its historical volatility, Continental Holdings Corp is 1.54 times less risky than Ta Ya. It trades about 0.01 of its potential returns per unit of risk. Ta Ya Electric is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 2,059 in Ta Ya Electric on September 1, 2024 and sell it today you would earn a total of 2,526 from holding Ta Ya Electric or generate 122.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Continental Holdings Corp vs. Ta Ya Electric
Performance |
| Timeline |
| Continental Holdings Corp |
| Ta Ya Electric |
Continental Holdings and Ta Ya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Continental Holdings and Ta Ya
The main advantage of trading using opposite Continental Holdings and Ta Ya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Continental Holdings position performs unexpectedly, Ta 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 Ta Ya will offset losses from the drop in Ta Ya's long position.| Continental Holdings vs. BES Engineering Co | Continental Holdings vs. Chien Kuo Construction | Continental Holdings vs. Hung Sheng Construction | Continental Holdings vs. YungShin Global Holding |
| Ta Ya vs. BES Engineering Co | Ta Ya vs. Continental Holdings Corp | Ta Ya vs. Kee Tai Properties | Ta Ya vs. Hung Sheng Construction |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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