Correlation Between Taiwan Cooperative and Tang Eng
Can any of the company-specific risk be diversified away by investing in both Taiwan Cooperative and Tang Eng 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 Taiwan Cooperative and Tang Eng into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Taiwan Cooperative Financial and Tang Eng Iron, you can compare the effects of market volatilities on Taiwan Cooperative and Tang Eng 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 Taiwan Cooperative with a short position of Tang Eng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taiwan Cooperative and Tang Eng.
Diversification Opportunities for Taiwan Cooperative and Tang Eng
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Taiwan and Tang is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Taiwan Cooperative Financial and Tang Eng Iron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tang Eng Iron and Taiwan Cooperative 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 Taiwan Cooperative Financial are associated (or correlated) with Tang Eng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tang Eng Iron has no effect on the direction of Taiwan Cooperative i.e., Taiwan Cooperative and Tang Eng go up and down completely randomly.
Pair Corralation between Taiwan Cooperative and Tang Eng
Assuming the 90 days trading horizon Taiwan Cooperative Financial is expected to under-perform the Tang Eng. But the stock apears to be less risky and, when comparing its historical volatility, Taiwan Cooperative Financial is 1.38 times less risky than Tang Eng. The stock trades about -0.09 of its potential returns per unit of risk. The Tang Eng Iron is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 3,285 in Tang Eng Iron on September 1, 2024 and sell it today you would earn a total of 30.00 from holding Tang Eng Iron or generate 0.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Taiwan Cooperative Financial vs. Tang Eng Iron
Performance |
| Timeline |
| Taiwan Cooperative |
| Tang Eng Iron |
Taiwan Cooperative and Tang Eng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taiwan Cooperative and Tang Eng
The main advantage of trading using opposite Taiwan Cooperative and Tang Eng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taiwan Cooperative position performs unexpectedly, Tang Eng 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 Tang Eng will offset losses from the drop in Tang Eng's long position.| Taiwan Cooperative vs. Central Reinsurance Corp | Taiwan Cooperative vs. Huaku Development Co | Taiwan Cooperative vs. Fubon Financial Holding |
| Tang Eng vs. Basso Industry Corp | Tang Eng vs. Chung Hsin Electric Machinery | Tang Eng vs. TYC Brother Industrial | Tang Eng vs. TECO Electric Machinery |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |