Correlation Between Deltamac Taiwan and Taiwan Glass
Can any of the company-specific risk be diversified away by investing in both Deltamac Taiwan and Taiwan Glass 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 Deltamac Taiwan and Taiwan Glass into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Deltamac Taiwan Co and Taiwan Glass Ind, you can compare the effects of market volatilities on Deltamac Taiwan and Taiwan Glass 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 Deltamac Taiwan with a short position of Taiwan Glass. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deltamac Taiwan and Taiwan Glass.
Diversification Opportunities for Deltamac Taiwan and Taiwan Glass
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Deltamac and Taiwan is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Deltamac Taiwan Co and Taiwan Glass Ind in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taiwan Glass Ind and Deltamac Taiwan 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 Deltamac Taiwan Co are associated (or correlated) with Taiwan Glass. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taiwan Glass Ind has no effect on the direction of Deltamac Taiwan i.e., Deltamac Taiwan and Taiwan Glass go up and down completely randomly.
Pair Corralation between Deltamac Taiwan and Taiwan Glass
Assuming the 90 days trading horizon Deltamac Taiwan Co is expected to under-perform the Taiwan Glass. In addition to that, Deltamac Taiwan is 3.05 times more volatile than Taiwan Glass Ind. It trades about -0.11 of its total potential returns per unit of risk. Taiwan Glass Ind is currently generating about 0.07 per unit of volatility. If you would invest 1,945 in Taiwan Glass Ind on September 1, 2024 and sell it today you would earn a total of 75.00 from holding Taiwan Glass Ind or generate 3.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Deltamac Taiwan Co vs. Taiwan Glass Ind
Performance |
| Timeline |
| Deltamac Taiwan |
| Taiwan Glass Ind |
Deltamac Taiwan and Taiwan Glass Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deltamac Taiwan and Taiwan Glass
The main advantage of trading using opposite Deltamac Taiwan and Taiwan Glass positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deltamac Taiwan position performs unexpectedly, Taiwan Glass 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 Glass will offset losses from the drop in Taiwan Glass' long position.| Deltamac Taiwan vs. Sinopac Financial Holdings | Deltamac Taiwan vs. Pontex Polyblend CoLtd | Deltamac Taiwan vs. Taiwan Cooperative Financial | Deltamac Taiwan vs. Farglory FTZ Investment |
| Taiwan Glass vs. Yulon Motor Co | Taiwan Glass vs. Far Eastern Department | Taiwan Glass vs. China Steel Corp | Taiwan Glass vs. Chang Hwa Commercial |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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