Correlation Between Taiwan FamilyMart and Wisher Industrial
Can any of the company-specific risk be diversified away by investing in both Taiwan FamilyMart and Wisher Industrial 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 Wisher Industrial 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 Wisher Industrial Co, you can compare the effects of market volatilities on Taiwan FamilyMart and Wisher Industrial 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 Wisher Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taiwan FamilyMart and Wisher Industrial.
Diversification Opportunities for Taiwan FamilyMart and Wisher Industrial
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Taiwan and Wisher is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Taiwan FamilyMart Co and Wisher Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wisher Industrial 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 Wisher Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wisher Industrial has no effect on the direction of Taiwan FamilyMart i.e., Taiwan FamilyMart and Wisher Industrial go up and down completely randomly.
Pair Corralation between Taiwan FamilyMart and Wisher Industrial
Assuming the 90 days trading horizon Taiwan FamilyMart Co is expected to generate 0.91 times more return on investment than Wisher Industrial. However, Taiwan FamilyMart Co is 1.1 times less risky than Wisher Industrial. It trades about 0.3 of its potential returns per unit of risk. Wisher Industrial Co is currently generating about -0.05 per unit of risk. If you would invest 18,800 in Taiwan FamilyMart Co on November 29, 2024 and sell it today you would earn a total of 350.00 from holding Taiwan FamilyMart Co or generate 1.86% 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. Wisher Industrial Co
Performance |
| Timeline |
| Taiwan FamilyMart |
| Wisher Industrial |
Taiwan FamilyMart and Wisher Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taiwan FamilyMart and Wisher Industrial
The main advantage of trading using opposite Taiwan FamilyMart and Wisher Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taiwan FamilyMart position performs unexpectedly, Wisher Industrial 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 Wisher Industrial will offset losses from the drop in Wisher Industrial'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 |
| Wisher Industrial vs. De Licacy Industrial | Wisher Industrial vs. Nien Hsing Textile | Wisher Industrial vs. Tainan Enterprises Co | Wisher Industrial vs. Tex Ray Industrial 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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