Correlation Between Taiwan FamilyMart and Ta Yih
Can any of the company-specific risk be diversified away by investing in both Taiwan FamilyMart and Ta Yih 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 Ta Yih 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 Ta Yih Industrial, you can compare the effects of market volatilities on Taiwan FamilyMart and Ta Yih 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 Ta Yih. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taiwan FamilyMart and Ta Yih.
Diversification Opportunities for Taiwan FamilyMart and Ta Yih
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Taiwan and 1521 is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Taiwan FamilyMart Co and Ta Yih Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ta Yih 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 Ta Yih. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ta Yih Industrial has no effect on the direction of Taiwan FamilyMart i.e., Taiwan FamilyMart and Ta Yih go up and down completely randomly.
Pair Corralation between Taiwan FamilyMart and Ta Yih
Assuming the 90 days trading horizon Taiwan FamilyMart Co is expected to generate 0.45 times more return on investment than Ta Yih. However, Taiwan FamilyMart Co is 2.24 times less risky than Ta Yih. It trades about 0.03 of its potential returns per unit of risk. Ta Yih Industrial is currently generating about -0.05 per unit of risk. If you would invest 18,467 in Taiwan FamilyMart Co on September 3, 2024 and sell it today you would earn a total of 533.00 from holding Taiwan FamilyMart Co or generate 2.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Taiwan FamilyMart Co vs. Ta Yih Industrial
Performance |
| Timeline |
| Taiwan FamilyMart |
| Ta Yih Industrial |
Taiwan FamilyMart and Ta Yih Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taiwan FamilyMart and Ta Yih
The main advantage of trading using opposite Taiwan FamilyMart and Ta Yih positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taiwan FamilyMart position performs unexpectedly, Ta Yih 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 Ta Yih will offset losses from the drop in Ta Yih's long position.| Taiwan FamilyMart vs. Standard Foods Corp | Taiwan FamilyMart vs. TTET Union Corp | Taiwan FamilyMart vs. Uni President Enterprises Corp | Taiwan FamilyMart vs. Charoen Pokphand Enterprise |
| Ta Yih vs. TYC Brother Industrial | Ta Yih vs. Basso Industry Corp | Ta Yih vs. Hota Industrial Mfg | Ta Yih vs. Tong Yang Industry |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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