Correlation Between Taigen Biopharmaceutica and Nan Ya
Can any of the company-specific risk be diversified away by investing in both Taigen Biopharmaceutica 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 Taigen Biopharmaceutica and Nan Ya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Taigen Biopharmaceuticals Holdings and Nan Ya Printed, you can compare the effects of market volatilities on Taigen Biopharmaceutica 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 Taigen Biopharmaceutica with a short position of Nan Ya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taigen Biopharmaceutica and Nan Ya.
Diversification Opportunities for Taigen Biopharmaceutica and Nan Ya
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Taigen and Nan is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Taigen Biopharmaceuticals Hold and Nan Ya Printed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nan Ya Printed and Taigen Biopharmaceutica 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 Taigen Biopharmaceuticals Holdings 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 Printed has no effect on the direction of Taigen Biopharmaceutica i.e., Taigen Biopharmaceutica and Nan Ya go up and down completely randomly.
Pair Corralation between Taigen Biopharmaceutica and Nan Ya
Assuming the 90 days trading horizon Taigen Biopharmaceuticals Holdings is expected to under-perform the Nan Ya. But the stock apears to be less risky and, when comparing its historical volatility, Taigen Biopharmaceuticals Holdings is 1.5 times less risky than Nan Ya. The stock trades about -0.24 of its potential returns per unit of risk. The Nan Ya Printed is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest 13,900 in Nan Ya Printed on August 26, 2024 and sell it today you would lose (1,400) from holding Nan Ya Printed or give up 10.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Taigen Biopharmaceuticals Hold vs. Nan Ya Printed
Performance |
| Timeline |
| Taigen Biopharmaceutica |
| Nan Ya Printed |
Taigen Biopharmaceutica and Nan Ya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taigen Biopharmaceutica and Nan Ya
The main advantage of trading using opposite Taigen Biopharmaceutica and Nan Ya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taigen Biopharmaceutica 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.| Taigen Biopharmaceutica vs. GenMont Biotech | Taigen Biopharmaceutica vs. Abnova Taiwan Corp | Taigen Biopharmaceutica vs. Wellell |
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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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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