Correlation Between ANJI Technology and ABC Taiwan
Can any of the company-specific risk be diversified away by investing in both ANJI Technology and ABC Taiwan 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 ANJI Technology and ABC Taiwan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ANJI Technology Co and ABC Taiwan Electronics, you can compare the effects of market volatilities on ANJI Technology and ABC Taiwan 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 ANJI Technology with a short position of ABC Taiwan. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANJI Technology and ABC Taiwan.
Diversification Opportunities for ANJI Technology and ABC Taiwan
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ANJI and ABC is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding ANJI Technology Co and ABC Taiwan Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ABC Taiwan Electronics and ANJI 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 ANJI Technology Co are associated (or correlated) with ABC Taiwan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ABC Taiwan Electronics has no effect on the direction of ANJI Technology i.e., ANJI Technology and ABC Taiwan go up and down completely randomly.
Pair Corralation between ANJI Technology and ABC Taiwan
Assuming the 90 days trading horizon ANJI Technology Co is expected to generate 0.97 times more return on investment than ABC Taiwan. However, ANJI Technology Co is 1.03 times less risky than ABC Taiwan. It trades about 0.05 of its potential returns per unit of risk. ABC Taiwan Electronics is currently generating about 0.0 per unit of risk. If you would invest 2,960 in ANJI Technology Co on September 13, 2024 and sell it today you would earn a total of 55.00 from holding ANJI Technology Co or generate 1.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ANJI Technology Co vs. ABC Taiwan Electronics
Performance |
| Timeline |
| ANJI Technology |
| ABC Taiwan Electronics |
ANJI Technology and ABC Taiwan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ANJI Technology and ABC Taiwan
The main advantage of trading using opposite ANJI Technology and ABC Taiwan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANJI Technology position performs unexpectedly, ABC Taiwan 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 ABC Taiwan will offset losses from the drop in ABC Taiwan's long position.| ANJI Technology vs. TSEC Corp | ANJI Technology vs. United Renewable Energy | ANJI Technology vs. Tainergy Tech Co | ANJI Technology vs. Motech Industries Co |
| ABC Taiwan vs. Ji Haw Industrial Co | ABC Taiwan vs. Softstar Entertainment | ABC Taiwan vs. Baotek Industrial Materials | ABC Taiwan vs. Gamania Digital Entertainment |
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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