Correlation Between Taiwan FamilyMart and Roo Hsing
Can any of the company-specific risk be diversified away by investing in both Taiwan FamilyMart and Roo Hsing 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 Roo Hsing 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 Roo Hsing Co, you can compare the effects of market volatilities on Taiwan FamilyMart and Roo Hsing 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 Roo Hsing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taiwan FamilyMart and Roo Hsing.
Diversification Opportunities for Taiwan FamilyMart and Roo Hsing
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Taiwan and Roo is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Taiwan FamilyMart Co and Roo Hsing Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roo Hsing 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 Roo Hsing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roo Hsing has no effect on the direction of Taiwan FamilyMart i.e., Taiwan FamilyMart and Roo Hsing go up and down completely randomly.
Pair Corralation between Taiwan FamilyMart and Roo Hsing
Assuming the 90 days trading horizon Taiwan FamilyMart is expected to generate 3.95 times less return on investment than Roo Hsing. But when comparing it to its historical volatility, Taiwan FamilyMart Co is 4.33 times less risky than Roo Hsing. It trades about 0.02 of its potential returns per unit of risk. Roo Hsing Co is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 309.00 in Roo Hsing Co on September 2, 2024 and sell it today you would earn a total of 7.00 from holding Roo Hsing Co or generate 2.27% 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. Roo Hsing Co
Performance |
| Timeline |
| Taiwan FamilyMart |
| Roo Hsing |
Taiwan FamilyMart and Roo Hsing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taiwan FamilyMart and Roo Hsing
The main advantage of trading using opposite Taiwan FamilyMart and Roo Hsing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taiwan FamilyMart position performs unexpectedly, Roo Hsing 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 Roo Hsing will offset losses from the drop in Roo Hsing'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 |
| Roo Hsing vs. Chaintech Technology Corp | Roo Hsing vs. Avision | Roo Hsing vs. Clevo Co | Roo Hsing vs. Elitegroup Computer Systems |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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