Correlation Between Ko Ja and Globe Union
Can any of the company-specific risk be diversified away by investing in both Ko Ja and Globe Union 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 Ko Ja and Globe Union into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ko Ja Cayman and Globe Union Industrial, you can compare the effects of market volatilities on Ko Ja and Globe Union 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 Ko Ja with a short position of Globe Union. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ko Ja and Globe Union.
Diversification Opportunities for Ko Ja and Globe Union
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 5215 and Globe is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Ko Ja Cayman and Globe Union Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globe Union Industrial and Ko Ja 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 Ko Ja Cayman are associated (or correlated) with Globe Union. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globe Union Industrial has no effect on the direction of Ko Ja i.e., Ko Ja and Globe Union go up and down completely randomly.
Pair Corralation between Ko Ja and Globe Union
Assuming the 90 days trading horizon Ko Ja Cayman is expected to generate 1.0 times more return on investment than Globe Union. However, Ko Ja is 1.0 times more volatile than Globe Union Industrial. It trades about -0.01 of its potential returns per unit of risk. Globe Union Industrial is currently generating about -0.07 per unit of risk. If you would invest 5,010 in Ko Ja Cayman on September 3, 2024 and sell it today you would lose (250.00) from holding Ko Ja Cayman or give up 4.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ko Ja Cayman vs. Globe Union Industrial
Performance |
| Timeline |
| Ko Ja Cayman |
| Globe Union Industrial |
Ko Ja and Globe Union Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ko Ja and Globe Union
The main advantage of trading using opposite Ko Ja and Globe Union positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ko Ja position performs unexpectedly, Globe Union 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 Globe Union will offset losses from the drop in Globe Union's long position.| Ko Ja vs. Taiwan Semiconductor Manufacturing | Ko Ja vs. Yang Ming Marine | Ko Ja vs. ASE Industrial Holding | Ko Ja vs. AU Optronics |
| Globe Union vs. Universal Microelectronics Co | Globe Union vs. AVerMedia Technologies | Globe Union vs. Symtek Automation Asia | Globe Union 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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