Correlation Between OBI Pharma and Taiwan Surface
Can any of the company-specific risk be diversified away by investing in both OBI Pharma and Taiwan Surface 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 OBI Pharma and Taiwan Surface into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OBI Pharma and Taiwan Surface Mounting, you can compare the effects of market volatilities on OBI Pharma and Taiwan Surface 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 OBI Pharma with a short position of Taiwan Surface. Check out your portfolio center. Please also check ongoing floating volatility patterns of OBI Pharma and Taiwan Surface.
Diversification Opportunities for OBI Pharma and Taiwan Surface
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between OBI and Taiwan is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding OBI Pharma and Taiwan Surface Mounting in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taiwan Surface Mounting and OBI Pharma 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 OBI Pharma are associated (or correlated) with Taiwan Surface. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taiwan Surface Mounting has no effect on the direction of OBI Pharma i.e., OBI Pharma and Taiwan Surface go up and down completely randomly.
Pair Corralation between OBI Pharma and Taiwan Surface
Assuming the 90 days trading horizon OBI Pharma is expected to under-perform the Taiwan Surface. In addition to that, OBI Pharma is 1.11 times more volatile than Taiwan Surface Mounting. It trades about -0.01 of its total potential returns per unit of risk. Taiwan Surface Mounting is currently generating about 0.02 per unit of volatility. If you would invest 9,760 in Taiwan Surface Mounting on August 29, 2024 and sell it today you would earn a total of 690.00 from holding Taiwan Surface Mounting or generate 7.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
OBI Pharma vs. Taiwan Surface Mounting
Performance |
| Timeline |
| OBI Pharma |
| Taiwan Surface Mounting |
OBI Pharma and Taiwan Surface Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OBI Pharma and Taiwan Surface
The main advantage of trading using opposite OBI Pharma and Taiwan Surface positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OBI Pharma position performs unexpectedly, Taiwan Surface 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 Surface will offset losses from the drop in Taiwan Surface's long position.| OBI Pharma vs. TaiMed Biologics | OBI Pharma vs. PharmaEngine | OBI Pharma vs. Medigen Biotechnology | OBI Pharma vs. TTY Biopharm Co |
| Taiwan Surface vs. Unimicron Technology Corp | Taiwan Surface vs. Flexium Interconnect | Taiwan Surface vs. Radiant Opto Electronics Corp | Taiwan Surface vs. Kinsus Interconnect 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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