Correlation Between Taiwan Taomee and Concord Securities
Can any of the company-specific risk be diversified away by investing in both Taiwan Taomee and Concord Securities 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 Taomee and Concord Securities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Taiwan Taomee Co and Concord Securities Co, you can compare the effects of market volatilities on Taiwan Taomee and Concord Securities 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 Taomee with a short position of Concord Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taiwan Taomee and Concord Securities.
Diversification Opportunities for Taiwan Taomee and Concord Securities
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Taiwan and Concord is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Taiwan Taomee Co and Concord Securities Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Concord Securities and Taiwan Taomee 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 Taomee Co are associated (or correlated) with Concord Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Concord Securities has no effect on the direction of Taiwan Taomee i.e., Taiwan Taomee and Concord Securities go up and down completely randomly.
Pair Corralation between Taiwan Taomee and Concord Securities
Assuming the 90 days trading horizon Taiwan Taomee is expected to generate 131.31 times less return on investment than Concord Securities. But when comparing it to its historical volatility, Taiwan Taomee Co is 3.73 times less risky than Concord Securities. It trades about 0.0 of its potential returns per unit of risk. Concord Securities Co is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 933.00 in Concord Securities Co on August 30, 2024 and sell it today you would earn a total of 442.00 from holding Concord Securities Co or generate 47.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Taiwan Taomee Co vs. Concord Securities Co
Performance |
| Timeline |
| Taiwan Taomee |
| Concord Securities |
Taiwan Taomee and Concord Securities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taiwan Taomee and Concord Securities
The main advantage of trading using opposite Taiwan Taomee and Concord Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taiwan Taomee position performs unexpectedly, Concord Securities 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 Concord Securities will offset losses from the drop in Concord Securities' long position.| Taiwan Taomee vs. Tai Tung Communication | Taiwan Taomee vs. San Fu Chemical | Taiwan Taomee vs. Qualipoly Chemical Corp | Taiwan Taomee vs. TWOWAY Communications |
| Concord Securities vs. Sinopac Financial Holdings | Concord Securities vs. China Development Financial | Concord Securities vs. Symtek Automation Asia | Concord Securities vs. CTCI Corp |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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