Correlation Between Tachan Securities and Capital Futures
Can any of the company-specific risk be diversified away by investing in both Tachan Securities and Capital Futures 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 Tachan Securities and Capital Futures into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tachan Securities Co and Capital Futures Corp, you can compare the effects of market volatilities on Tachan Securities and Capital Futures 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 Tachan Securities with a short position of Capital Futures. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tachan Securities and Capital Futures.
Diversification Opportunities for Tachan Securities and Capital Futures
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tachan and Capital is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Tachan Securities Co and Capital Futures Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Futures Corp and Tachan Securities 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 Tachan Securities Co are associated (or correlated) with Capital Futures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Futures Corp has no effect on the direction of Tachan Securities i.e., Tachan Securities and Capital Futures go up and down completely randomly.
Pair Corralation between Tachan Securities and Capital Futures
Assuming the 90 days trading horizon Tachan Securities is expected to generate 3.58 times less return on investment than Capital Futures. But when comparing it to its historical volatility, Tachan Securities Co is 1.99 times less risky than Capital Futures. It trades about 0.03 of its potential returns per unit of risk. Capital Futures Corp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 4,945 in Capital Futures Corp on September 14, 2024 and sell it today you would earn a total of 945.00 from holding Capital Futures Corp or generate 19.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tachan Securities Co vs. Capital Futures Corp
Performance |
| Timeline |
| Tachan Securities |
| Capital Futures Corp |
Tachan Securities and Capital Futures Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tachan Securities and Capital Futures
The main advantage of trading using opposite Tachan Securities and Capital Futures positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tachan Securities position performs unexpectedly, Capital Futures 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 Capital Futures will offset losses from the drop in Capital Futures' long position.| Tachan Securities vs. Mechema Chemicals Int | Tachan Securities vs. Yong Shun Chemical | Tachan Securities vs. Sports Gear Co | Tachan Securities vs. Taiwan Speciality Chemicals |
| Capital Futures vs. IBF Financial Holdings | Capital Futures vs. Capital Securities Corp | Capital Futures vs. President Securities Corp | Capital Futures vs. China Bills Finance |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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