Correlation Between Poya International and Taiwan FamilyMart
Can any of the company-specific risk be diversified away by investing in both Poya International and Taiwan FamilyMart 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 Poya International and Taiwan FamilyMart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Poya International Co and Taiwan FamilyMart Co, you can compare the effects of market volatilities on Poya International and Taiwan FamilyMart 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 Poya International with a short position of Taiwan FamilyMart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Poya International and Taiwan FamilyMart.
Diversification Opportunities for Poya International and Taiwan FamilyMart
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Poya and Taiwan is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Poya International Co and Taiwan FamilyMart Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taiwan FamilyMart and Poya International 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 Poya International Co are associated (or correlated) with Taiwan FamilyMart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taiwan FamilyMart has no effect on the direction of Poya International i.e., Poya International and Taiwan FamilyMart go up and down completely randomly.
Pair Corralation between Poya International and Taiwan FamilyMart
Assuming the 90 days trading horizon Poya International Co is expected to under-perform the Taiwan FamilyMart. In addition to that, Poya International is 1.08 times more volatile than Taiwan FamilyMart Co. It trades about -0.35 of its total potential returns per unit of risk. Taiwan FamilyMart Co is currently generating about 0.08 per unit of volatility. If you would invest 18,750 in Taiwan FamilyMart Co on August 28, 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 | 95.45% |
| Values | Daily Returns |
Poya International Co vs. Taiwan FamilyMart Co
Performance |
| Timeline |
| Poya International |
| Taiwan FamilyMart |
Poya International and Taiwan FamilyMart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Poya International and Taiwan FamilyMart
The main advantage of trading using opposite Poya International and Taiwan FamilyMart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Poya International position performs unexpectedly, Taiwan FamilyMart 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 Taiwan FamilyMart will offset losses from the drop in Taiwan FamilyMart's long position.| Poya International vs. Taiwan Semiconductor Manufacturing | Poya International vs. Hon Hai Precision | Poya International vs. MediaTek | Poya International vs. Chunghwa Telecom Co |
| Taiwan FamilyMart vs. President Chain Store | Taiwan FamilyMart vs. Uni President Enterprises Corp | Taiwan FamilyMart vs. Poya International Co | Taiwan FamilyMart vs. Taiwan Secom 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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