Correlation Between Taiwan FamilyMart and TTET Union
Can any of the company-specific risk be diversified away by investing in both Taiwan FamilyMart and TTET 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 Taiwan FamilyMart and TTET Union into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Taiwan FamilyMart Co and TTET Union Corp, you can compare the effects of market volatilities on Taiwan FamilyMart and TTET 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 Taiwan FamilyMart with a short position of TTET Union. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taiwan FamilyMart and TTET Union.
Diversification Opportunities for Taiwan FamilyMart and TTET Union
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Taiwan and TTET is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Taiwan FamilyMart Co and TTET Union Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TTET Union Corp and Taiwan FamilyMart 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 FamilyMart Co are associated (or correlated) with TTET Union. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TTET Union Corp has no effect on the direction of Taiwan FamilyMart i.e., Taiwan FamilyMart and TTET Union go up and down completely randomly.
Pair Corralation between Taiwan FamilyMart and TTET Union
Assuming the 90 days trading horizon Taiwan FamilyMart Co is expected to generate 0.99 times more return on investment than TTET Union. However, Taiwan FamilyMart Co is 1.01 times less risky than TTET Union. It trades about 0.06 of its potential returns per unit of risk. TTET Union Corp is currently generating about -0.27 per unit of risk. If you would invest 18,750 in Taiwan FamilyMart Co on September 4, 2024 and sell it today you would earn a total of 150.00 from holding Taiwan FamilyMart Co or generate 0.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Taiwan FamilyMart Co vs. TTET Union Corp
Performance |
| Timeline |
| Taiwan FamilyMart |
| TTET Union Corp |
Taiwan FamilyMart and TTET Union Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taiwan FamilyMart and TTET Union
The main advantage of trading using opposite Taiwan FamilyMart and TTET Union positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taiwan FamilyMart position performs unexpectedly, TTET 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 TTET Union will offset losses from the drop in TTET Union's long position.| Taiwan FamilyMart vs. President Chain Store | Taiwan FamilyMart vs. Uni President Enterprises Corp | Taiwan FamilyMart vs. Poya International Co | Taiwan FamilyMart vs. Hotai Motor Co |
| TTET Union vs. Charoen Pokphand Enterprise | TTET Union vs. Standard Foods Corp | TTET Union vs. Uni President Enterprises Corp | TTET Union vs. Great Wall Enterprise |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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