Correlation Between Global Brands and Taiwan Hopax
Can any of the company-specific risk be diversified away by investing in both Global Brands and Taiwan Hopax 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 Global Brands and Taiwan Hopax into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Brands Manufacture and Taiwan Hopax Chemsistry, you can compare the effects of market volatilities on Global Brands and Taiwan Hopax 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 Global Brands with a short position of Taiwan Hopax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Brands and Taiwan Hopax.
Diversification Opportunities for Global Brands and Taiwan Hopax
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Global and Taiwan is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Global Brands Manufacture and Taiwan Hopax Chemsistry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taiwan Hopax Chemsistry and Global Brands 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 Global Brands Manufacture are associated (or correlated) with Taiwan Hopax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taiwan Hopax Chemsistry has no effect on the direction of Global Brands i.e., Global Brands and Taiwan Hopax go up and down completely randomly.
Pair Corralation between Global Brands and Taiwan Hopax
Assuming the 90 days trading horizon Global Brands Manufacture is expected to generate 1.34 times more return on investment than Taiwan Hopax. However, Global Brands is 1.34 times more volatile than Taiwan Hopax Chemsistry. It trades about -0.23 of its potential returns per unit of risk. Taiwan Hopax Chemsistry is currently generating about -0.42 per unit of risk. If you would invest 5,870 in Global Brands Manufacture on September 4, 2024 and sell it today you would lose (420.00) from holding Global Brands Manufacture or give up 7.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Brands Manufacture vs. Taiwan Hopax Chemsistry
Performance |
| Timeline |
| Global Brands Manufacture |
| Taiwan Hopax Chemsistry |
Global Brands and Taiwan Hopax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Brands and Taiwan Hopax
The main advantage of trading using opposite Global Brands and Taiwan Hopax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Brands position performs unexpectedly, Taiwan Hopax 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 Hopax will offset losses from the drop in Taiwan Hopax's long position.| Global Brands vs. HannStar Board Corp | Global Brands vs. ITEQ Corp | Global Brands vs. Unitech Printed Circuit | Global Brands vs. Career Technology MFG |
| Taiwan Hopax vs. Mechema Chemicals Int | Taiwan Hopax vs. Coremax Corp | Taiwan Hopax vs. China Steel Chemical | Taiwan Hopax vs. Wafer Works |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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