Correlation Between Cameo Communications and Taiwan Taomee
Can any of the company-specific risk be diversified away by investing in both Cameo Communications and Taiwan Taomee 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 Cameo Communications and Taiwan Taomee into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cameo Communications and Taiwan Taomee Co, you can compare the effects of market volatilities on Cameo Communications and Taiwan Taomee 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 Cameo Communications with a short position of Taiwan Taomee. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cameo Communications and Taiwan Taomee.
Diversification Opportunities for Cameo Communications and Taiwan Taomee
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Cameo and Taiwan is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Cameo Communications and Taiwan Taomee Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taiwan Taomee and Cameo Communications 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 Cameo Communications are associated (or correlated) with Taiwan Taomee. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taiwan Taomee has no effect on the direction of Cameo Communications i.e., Cameo Communications and Taiwan Taomee go up and down completely randomly.
Pair Corralation between Cameo Communications and Taiwan Taomee
Assuming the 90 days trading horizon Cameo Communications is expected to generate 1.1 times more return on investment than Taiwan Taomee. However, Cameo Communications is 1.1 times more volatile than Taiwan Taomee Co. It trades about 0.05 of its potential returns per unit of risk. Taiwan Taomee Co is currently generating about -0.06 per unit of risk. If you would invest 993.00 in Cameo Communications on September 3, 2024 and sell it today you would earn a total of 157.00 from holding Cameo Communications or generate 15.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cameo Communications vs. Taiwan Taomee Co
Performance |
| Timeline |
| Cameo Communications |
| Taiwan Taomee |
Cameo Communications and Taiwan Taomee Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cameo Communications and Taiwan Taomee
The main advantage of trading using opposite Cameo Communications and Taiwan Taomee positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cameo Communications position performs unexpectedly, Taiwan Taomee 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 Taomee will offset losses from the drop in Taiwan Taomee's long position.| Cameo Communications vs. Taiwan Semiconductor Manufacturing | Cameo Communications vs. Yang Ming Marine | Cameo Communications vs. ASE Industrial Holding | Cameo Communications vs. AU Optronics |
| Taiwan Taomee vs. U Media Communications | Taiwan Taomee vs. Ma Kuang Healthcare | Taiwan Taomee vs. STARLUX Airlines Co | Taiwan Taomee vs. Cameo Communications |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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