Correlation Between Taiwan Surface and FSP Technology
Can any of the company-specific risk be diversified away by investing in both Taiwan Surface and FSP Technology 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 Taiwan Surface and FSP Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Taiwan Surface Mounting and FSP Technology, you can compare the effects of market volatilities on Taiwan Surface and FSP Technology 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 Taiwan Surface with a short position of FSP Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taiwan Surface and FSP Technology.
Diversification Opportunities for Taiwan Surface and FSP Technology
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Taiwan and FSP is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Taiwan Surface Mounting and FSP Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FSP Technology and Taiwan Surface 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 Taiwan Surface Mounting are associated (or correlated) with FSP Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FSP Technology has no effect on the direction of Taiwan Surface i.e., Taiwan Surface and FSP Technology go up and down completely randomly.
Pair Corralation between Taiwan Surface and FSP Technology
Assuming the 90 days trading horizon Taiwan Surface is expected to generate 4.5 times less return on investment than FSP Technology. But when comparing it to its historical volatility, Taiwan Surface Mounting is 1.02 times less risky than FSP Technology. It trades about 0.02 of its potential returns per unit of risk. FSP Technology is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 3,835 in FSP Technology on September 3, 2024 and sell it today you would earn a total of 2,695 from holding FSP Technology or generate 70.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Taiwan Surface Mounting vs. FSP Technology
Performance |
| Timeline |
| Taiwan Surface Mounting |
| FSP Technology |
Taiwan Surface and FSP Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taiwan Surface and FSP Technology
The main advantage of trading using opposite Taiwan Surface and FSP Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taiwan Surface position performs unexpectedly, FSP Technology 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 FSP Technology will offset losses from the drop in FSP Technology's long position.| Taiwan Surface vs. Unimicron Technology Corp | Taiwan Surface vs. Flexium Interconnect | Taiwan Surface vs. Radiant Opto Electronics Corp | Taiwan Surface vs. Kinsus Interconnect Technology |
| FSP Technology vs. Universal Microelectronics Co | FSP Technology vs. AVerMedia Technologies | FSP Technology vs. Symtek Automation Asia | FSP Technology vs. WiseChip Semiconductor |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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