Correlation Between Taiwan FamilyMart and Hunya Foods
Can any of the company-specific risk be diversified away by investing in both Taiwan FamilyMart and Hunya Foods 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 Hunya Foods 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 Hunya Foods Co, you can compare the effects of market volatilities on Taiwan FamilyMart and Hunya Foods 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 Hunya Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taiwan FamilyMart and Hunya Foods.
Diversification Opportunities for Taiwan FamilyMart and Hunya Foods
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Taiwan and Hunya is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Taiwan FamilyMart Co and Hunya Foods Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hunya Foods 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 Hunya Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hunya Foods has no effect on the direction of Taiwan FamilyMart i.e., Taiwan FamilyMart and Hunya Foods go up and down completely randomly.
Pair Corralation between Taiwan FamilyMart and Hunya Foods
Assuming the 90 days trading horizon Taiwan FamilyMart Co is expected to generate 0.68 times more return on investment than Hunya Foods. However, Taiwan FamilyMart Co is 1.47 times less risky than Hunya Foods. It trades about 0.05 of its potential returns per unit of risk. Hunya Foods Co is currently generating about -0.03 per unit of risk. If you would invest 17,788 in Taiwan FamilyMart Co on September 1, 2024 and sell it today you would earn a total of 1,212 from holding Taiwan FamilyMart Co or generate 6.81% 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. Hunya Foods Co
Performance |
| Timeline |
| Taiwan FamilyMart |
| Hunya Foods |
Taiwan FamilyMart and Hunya Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taiwan FamilyMart and Hunya Foods
The main advantage of trading using opposite Taiwan FamilyMart and Hunya Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taiwan FamilyMart position performs unexpectedly, Hunya Foods 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 Hunya Foods will offset losses from the drop in Hunya Foods' long position.| Taiwan FamilyMart vs. De Licacy Industrial | Taiwan FamilyMart vs. Wisher Industrial Co | Taiwan FamilyMart vs. Tainan Enterprises Co |
| Hunya Foods vs. De Licacy Industrial | Hunya Foods vs. Wisher Industrial Co | Hunya Foods vs. Tainan Enterprises Co |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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