Correlation Between Tainet Communication and New Asia
Can any of the company-specific risk be diversified away by investing in both Tainet Communication and New Asia 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 Tainet Communication and New Asia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tainet Communication System and New Asia Construction, you can compare the effects of market volatilities on Tainet Communication and New Asia 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 Tainet Communication with a short position of New Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tainet Communication and New Asia.
Diversification Opportunities for Tainet Communication and New Asia
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Tainet and New is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Tainet Communication System and New Asia Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Asia Construction and Tainet Communication 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 Tainet Communication System are associated (or correlated) with New Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Asia Construction has no effect on the direction of Tainet Communication i.e., Tainet Communication and New Asia go up and down completely randomly.
Pair Corralation between Tainet Communication and New Asia
Assuming the 90 days trading horizon Tainet Communication is expected to generate 1.79 times less return on investment than New Asia. In addition to that, Tainet Communication is 1.07 times more volatile than New Asia Construction. It trades about 0.05 of its total potential returns per unit of risk. New Asia Construction is currently generating about 0.09 per unit of volatility. If you would invest 499.00 in New Asia Construction on September 12, 2024 and sell it today you would earn a total of 806.00 from holding New Asia Construction or generate 161.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tainet Communication System vs. New Asia Construction
Performance |
| Timeline |
| Tainet Communication |
| New Asia Construction |
Tainet Communication and New Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tainet Communication and New Asia
The main advantage of trading using opposite Tainet Communication and New Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tainet Communication position performs unexpectedly, New Asia 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 New Asia will offset losses from the drop in New Asia's long position.| Tainet Communication vs. Gemtek Technology Co | Tainet Communication vs. Ruentex Development Co | Tainet Communication vs. WiseChip Semiconductor | Tainet Communication vs. Novatek Microelectronics Corp |
| New Asia vs. Yang Ming Marine | New Asia vs. Wan Hai Lines | New Asia vs. U Ming Marine Transport | New Asia vs. Taiwan Navigation Co |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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