Correlation Between Singtex Industrial and Taiwan Weighted
Can any of the company-specific risk be diversified away by investing in both Singtex Industrial and Taiwan Weighted 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 Singtex Industrial and Taiwan Weighted into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Singtex Industrial Co and Taiwan Weighted, you can compare the effects of market volatilities on Singtex Industrial and Taiwan Weighted 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 Singtex Industrial with a short position of Taiwan Weighted. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singtex Industrial and Taiwan Weighted.
Diversification Opportunities for Singtex Industrial and Taiwan Weighted
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Singtex and Taiwan is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Singtex Industrial Co and Taiwan Weighted in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taiwan Weighted and Singtex Industrial 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 Singtex Industrial Co are associated (or correlated) with Taiwan Weighted. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taiwan Weighted has no effect on the direction of Singtex Industrial i.e., Singtex Industrial and Taiwan Weighted go up and down completely randomly.
Pair Corralation between Singtex Industrial and Taiwan Weighted
Assuming the 90 days trading horizon Singtex Industrial Co is expected to under-perform the Taiwan Weighted. In addition to that, Singtex Industrial is 1.35 times more volatile than Taiwan Weighted. It trades about 0.0 of its total potential returns per unit of risk. Taiwan Weighted is currently generating about 0.1 per unit of volatility. If you would invest 1,428,513 in Taiwan Weighted on September 14, 2024 and sell it today you would earn a total of 876,167 from holding Taiwan Weighted or generate 61.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.75% |
| Values | Daily Returns |
Singtex Industrial Co vs. Taiwan Weighted
Performance |
| Timeline |
Singtex Industrial and Taiwan Weighted Volatility Contrast
Predicted Return Density |
| Returns |
Singtex Industrial Co
Pair trading matchups for Singtex Industrial
Taiwan Weighted
Pair trading matchups for Taiwan Weighted
Pair Trading with Singtex Industrial and Taiwan Weighted
The main advantage of trading using opposite Singtex Industrial and Taiwan Weighted positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singtex Industrial position performs unexpectedly, Taiwan Weighted 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 Weighted will offset losses from the drop in Taiwan Weighted's long position.| Singtex Industrial vs. Eclat Textile Co | Singtex Industrial vs. Ruentex Industries | Singtex Industrial vs. Shinkong Synthetic Fiber | Singtex Industrial vs. Taiwan Paiho |
| Taiwan Weighted vs. Asia Metal Industries | Taiwan Weighted vs. Chinese Gamer International | Taiwan Weighted vs. Great China Metal | Taiwan Weighted vs. GAME HOURS |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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