Correlation Between Tait Marketing and Excellence Optoelectronic
Can any of the company-specific risk be diversified away by investing in both Tait Marketing and Excellence Optoelectronic 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 Tait Marketing and Excellence Optoelectronic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tait Marketing Distribution and Excellence Optoelectronic, you can compare the effects of market volatilities on Tait Marketing and Excellence Optoelectronic 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 Tait Marketing with a short position of Excellence Optoelectronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tait Marketing and Excellence Optoelectronic.
Diversification Opportunities for Tait Marketing and Excellence Optoelectronic
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tait and Excellence is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Tait Marketing Distribution and Excellence Optoelectronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Excellence Optoelectronic and Tait Marketing 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 Tait Marketing Distribution are associated (or correlated) with Excellence Optoelectronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Excellence Optoelectronic has no effect on the direction of Tait Marketing i.e., Tait Marketing and Excellence Optoelectronic go up and down completely randomly.
Pair Corralation between Tait Marketing and Excellence Optoelectronic
Assuming the 90 days trading horizon Tait Marketing Distribution is expected to generate 0.55 times more return on investment than Excellence Optoelectronic. However, Tait Marketing Distribution is 1.8 times less risky than Excellence Optoelectronic. It trades about 0.01 of its potential returns per unit of risk. Excellence Optoelectronic is currently generating about 0.0 per unit of risk. If you would invest 3,794 in Tait Marketing Distribution on August 31, 2024 and sell it today you would earn a total of 146.00 from holding Tait Marketing Distribution or generate 3.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tait Marketing Distribution vs. Excellence Optoelectronic
Performance |
| Timeline |
| Tait Marketing Distr |
| Excellence Optoelectronic |
Tait Marketing and Excellence Optoelectronic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tait Marketing and Excellence Optoelectronic
The main advantage of trading using opposite Tait Marketing and Excellence Optoelectronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tait Marketing position performs unexpectedly, Excellence Optoelectronic 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 Excellence Optoelectronic will offset losses from the drop in Excellence Optoelectronic's long position.| Tait Marketing vs. YuantaP shares Taiwan Top | Tait Marketing vs. YuantaP shares Taiwan Electronics | Tait Marketing vs. YuantaP shares Taiwan Mid Cap | Tait Marketing vs. Fubon MSCI Taiwan |
| Excellence Optoelectronic vs. Hon Hai Precision | Excellence Optoelectronic vs. Delta Electronics | Excellence Optoelectronic vs. LARGAN Precision Co | Excellence Optoelectronic vs. Yageo Corp |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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