Correlation Between Te Chang and Insyde Software
Can any of the company-specific risk be diversified away by investing in both Te Chang and Insyde Software 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 Te Chang and Insyde Software into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Te Chang Construction and Insyde Software, you can compare the effects of market volatilities on Te Chang and Insyde Software 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 Te Chang with a short position of Insyde Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Te Chang and Insyde Software.
Diversification Opportunities for Te Chang and Insyde Software
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between 5511 and Insyde is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Te Chang Construction and Insyde Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insyde Software and Te 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 Te Chang Construction are associated (or correlated) with Insyde Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insyde Software has no effect on the direction of Te Chang i.e., Te Chang and Insyde Software go up and down completely randomly.
Pair Corralation between Te Chang and Insyde Software
Assuming the 90 days trading horizon Te Chang Construction is expected to under-perform the Insyde Software. But the stock apears to be less risky and, when comparing its historical volatility, Te Chang Construction is 2.6 times less risky than Insyde Software. The stock trades about -0.02 of its potential returns per unit of risk. The Insyde Software is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 36,950 in Insyde Software on September 1, 2024 and sell it today you would earn a total of 9,850 from holding Insyde Software or generate 26.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Te Chang Construction vs. Insyde Software
Performance |
| Timeline |
| Te Chang Construction |
| Insyde Software |
Te Chang and Insyde Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Te Chang and Insyde Software
The main advantage of trading using opposite Te Chang and Insyde Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Te Chang position performs unexpectedly, Insyde Software 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 Insyde Software will offset losses from the drop in Insyde Software's long position.| Te Chang vs. Ruentex Development Co | Te Chang vs. United Integrated Services | Te Chang vs. CTCI Corp | Te Chang vs. Continental Holdings Corp |
| Insyde Software vs. Quanta Storage | Insyde Software vs. Eagle Cold Storage | Insyde Software vs. Ton Yi Industrial | Insyde Software vs. Coxon Precise Industrial |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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