Correlation Between Coremax Corp and Great Taipei
Can any of the company-specific risk be diversified away by investing in both Coremax Corp and Great Taipei 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 Coremax Corp and Great Taipei into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coremax Corp and Great Taipei Gas, you can compare the effects of market volatilities on Coremax Corp and Great Taipei 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 Coremax Corp with a short position of Great Taipei. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coremax Corp and Great Taipei.
Diversification Opportunities for Coremax Corp and Great Taipei
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Coremax and Great is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Coremax Corp and Great Taipei Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great Taipei Gas and Coremax Corp 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 Coremax Corp are associated (or correlated) with Great Taipei. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great Taipei Gas has no effect on the direction of Coremax Corp i.e., Coremax Corp and Great Taipei go up and down completely randomly.
Pair Corralation between Coremax Corp and Great Taipei
Assuming the 90 days trading horizon Coremax Corp is expected to generate 8.03 times more return on investment than Great Taipei. However, Coremax Corp is 8.03 times more volatile than Great Taipei Gas. It trades about 0.08 of its potential returns per unit of risk. Great Taipei Gas is currently generating about -0.05 per unit of risk. If you would invest 5,860 in Coremax Corp on August 25, 2024 and sell it today you would earn a total of 340.00 from holding Coremax Corp or generate 5.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Coremax Corp vs. Great Taipei Gas
Performance |
| Timeline |
| Coremax Corp |
| Great Taipei Gas |
Coremax Corp and Great Taipei Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coremax Corp and Great Taipei
The main advantage of trading using opposite Coremax Corp and Great Taipei positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coremax Corp position performs unexpectedly, Great Taipei 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 Great Taipei will offset losses from the drop in Great Taipei's long position.| Coremax Corp vs. Delta Electronics | Coremax Corp vs. China Steel Chemical | Coremax Corp vs. Hota Industrial Mfg | Coremax Corp vs. Ruentex Development Co |
| Great Taipei vs. Taiwan Secom Co | Great Taipei vs. Taiwan Shin Kong | Great Taipei vs. Taiwan Cogeneration Corp | Great Taipei vs. Shin Shin Natural |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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