Correlation Between Taiwan FamilyMart and Poya International
Can any of the company-specific risk be diversified away by investing in both Taiwan FamilyMart and Poya International 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 Poya International 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 Poya International Co, you can compare the effects of market volatilities on Taiwan FamilyMart and Poya International 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 Poya International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taiwan FamilyMart and Poya International.
Diversification Opportunities for Taiwan FamilyMart and Poya International
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Taiwan and Poya is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Taiwan FamilyMart Co and Poya International Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Poya International 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 Poya International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Poya International has no effect on the direction of Taiwan FamilyMart i.e., Taiwan FamilyMart and Poya International go up and down completely randomly.
Pair Corralation between Taiwan FamilyMart and Poya International
Assuming the 90 days trading horizon Taiwan FamilyMart Co is expected to generate 0.94 times more return on investment than Poya International. However, Taiwan FamilyMart Co is 1.06 times less risky than Poya International. It trades about 0.08 of its potential returns per unit of risk. Poya International Co is currently generating about -0.32 per unit of risk. If you would invest 18,750 in Taiwan FamilyMart Co on August 29, 2024 and sell it today you would earn a total of 200.00 from holding Taiwan FamilyMart Co or generate 1.07% 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. Poya International Co
Performance |
| Timeline |
| Taiwan FamilyMart |
| Poya International |
Taiwan FamilyMart and Poya International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taiwan FamilyMart and Poya International
The main advantage of trading using opposite Taiwan FamilyMart and Poya International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taiwan FamilyMart position performs unexpectedly, Poya International 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 Poya International will offset losses from the drop in Poya International'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 |
| Poya International vs. Taiwan FamilyMart Co | Poya International vs. President Chain Store | Poya International vs. Eclat Textile Co | Poya International vs. Aspeed Technology |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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