Correlation Between Career Technology and Taiflex Scientific
Can any of the company-specific risk be diversified away by investing in both Career Technology and Taiflex Scientific 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 Career Technology and Taiflex Scientific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Career Technology MFG and Taiflex Scientific Co, you can compare the effects of market volatilities on Career Technology and Taiflex Scientific 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 Career Technology with a short position of Taiflex Scientific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Career Technology and Taiflex Scientific.
Diversification Opportunities for Career Technology and Taiflex Scientific
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Career and Taiflex is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Career Technology MFG and Taiflex Scientific Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taiflex Scientific and Career Technology 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 Career Technology MFG are associated (or correlated) with Taiflex Scientific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taiflex Scientific has no effect on the direction of Career Technology i.e., Career Technology and Taiflex Scientific go up and down completely randomly.
Pair Corralation between Career Technology and Taiflex Scientific
Assuming the 90 days trading horizon Career Technology MFG is expected to under-perform the Taiflex Scientific. But the stock apears to be less risky and, when comparing its historical volatility, Career Technology MFG is 1.44 times less risky than Taiflex Scientific. The stock trades about -0.35 of its potential returns per unit of risk. The Taiflex Scientific Co is currently generating about -0.18 of returns per unit of risk over similar time horizon. If you would invest 5,520 in Taiflex Scientific Co on September 12, 2024 and sell it today you would lose (745.00) from holding Taiflex Scientific Co or give up 13.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Career Technology MFG vs. Taiflex Scientific Co
Performance |
| Timeline |
| Career Technology MFG |
| Taiflex Scientific |
Career Technology and Taiflex Scientific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Career Technology and Taiflex Scientific
The main advantage of trading using opposite Career Technology and Taiflex Scientific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Career Technology position performs unexpectedly, Taiflex Scientific 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 Taiflex Scientific will offset losses from the drop in Taiflex Scientific's long position.| Career Technology vs. AU Optronics | Career Technology vs. Innolux Corp | Career Technology vs. Ruentex Development Co | Career Technology vs. WiseChip Semiconductor |
| Taiflex Scientific vs. Flexium Interconnect | Taiflex Scientific vs. Career Technology MFG | Taiflex Scientific vs. Powertech Technology | Taiflex Scientific vs. Elite Material 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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