Correlation Between Chia Chang and Taiwan Surface
Can any of the company-specific risk be diversified away by investing in both Chia Chang 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 Chia Chang and Taiwan Surface into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chia Chang Co and Taiwan Surface Mounting, you can compare the effects of market volatilities on Chia Chang 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 Chia Chang with a short position of Taiwan Surface. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chia Chang and Taiwan Surface.
Diversification Opportunities for Chia Chang and Taiwan Surface
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chia and Taiwan is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Chia Chang Co 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 Chia Chang 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 Chia Chang Co 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 Chia Chang i.e., Chia Chang and Taiwan Surface go up and down completely randomly.
Pair Corralation between Chia Chang and Taiwan Surface
Assuming the 90 days trading horizon Chia Chang Co is expected to generate 0.57 times more return on investment than Taiwan Surface. However, Chia Chang Co is 1.76 times less risky than Taiwan Surface. It trades about 0.05 of its potential returns per unit of risk. Taiwan Surface Mounting is currently generating about 0.02 per unit of risk. If you would invest 3,352 in Chia Chang Co on September 12, 2024 and sell it today you would earn a total of 738.00 from holding Chia Chang Co or generate 22.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.58% |
| Values | Daily Returns |
Chia Chang Co vs. Taiwan Surface Mounting
Performance |
| Timeline |
| Chia Chang |
| Taiwan Surface Mounting |
Chia Chang and Taiwan Surface Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chia Chang and Taiwan Surface
The main advantage of trading using opposite Chia Chang and Taiwan Surface positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chia Chang 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.| Chia Chang vs. Yang Ming Marine | Chia Chang vs. Wan Hai Lines | Chia Chang vs. U Ming Marine Transport | Chia Chang vs. Taiwan Navigation Co |
| Taiwan Surface vs. AU Optronics | Taiwan Surface vs. Innolux Corp | Taiwan Surface vs. Ruentex Development Co | Taiwan Surface vs. WiseChip Semiconductor |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |