Correlation Between Taiwan Cooperative and Merry Electronics
Can any of the company-specific risk be diversified away by investing in both Taiwan Cooperative and Merry Electronics 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 Merry Electronics 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 Merry Electronics Co, you can compare the effects of market volatilities on Taiwan Cooperative and Merry Electronics 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 Merry Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taiwan Cooperative and Merry Electronics.
Diversification Opportunities for Taiwan Cooperative and Merry Electronics
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Taiwan and Merry is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Taiwan Cooperative Financial and Merry Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Merry Electronics 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 Merry Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Merry Electronics has no effect on the direction of Taiwan Cooperative i.e., Taiwan Cooperative and Merry Electronics go up and down completely randomly.
Pair Corralation between Taiwan Cooperative and Merry Electronics
Assuming the 90 days trading horizon Taiwan Cooperative Financial is expected to generate 0.31 times more return on investment than Merry Electronics. However, Taiwan Cooperative Financial is 3.23 times less risky than Merry Electronics. It trades about -0.11 of its potential returns per unit of risk. Merry Electronics Co is currently generating about -0.06 per unit of risk. If you would invest 2,550 in Taiwan Cooperative Financial on August 29, 2024 and sell it today you would lose (40.00) from holding Taiwan Cooperative Financial or give up 1.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Taiwan Cooperative Financial vs. Merry Electronics Co
Performance |
| Timeline |
| Taiwan Cooperative |
| Merry Electronics |
Taiwan Cooperative and Merry Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taiwan Cooperative and Merry Electronics
The main advantage of trading using opposite Taiwan Cooperative and Merry Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taiwan Cooperative position performs unexpectedly, Merry Electronics 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 Merry Electronics will offset losses from the drop in Merry Electronics' long position.| Taiwan Cooperative vs. Taiwan Secom Co | Taiwan Cooperative vs. TTET Union Corp | Taiwan Cooperative vs. China Steel Chemical | Taiwan Cooperative vs. Taiwan Shin Kong |
| Merry Electronics vs. Chung Hwa Food | Merry Electronics vs. Oceanic Beverages Co | Merry Electronics vs. Alchip Technologies | Merry Electronics vs. United Radiant Technology |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |