Correlation Between Taiwan Hopax and Pan Asia
Can any of the company-specific risk be diversified away by investing in both Taiwan Hopax and Pan Asia 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 Hopax and Pan Asia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Taiwan Hopax Chemsistry and Pan Asia Chemical, you can compare the effects of market volatilities on Taiwan Hopax and Pan Asia 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 Hopax with a short position of Pan Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taiwan Hopax and Pan Asia.
Diversification Opportunities for Taiwan Hopax and Pan Asia
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Taiwan and Pan is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Taiwan Hopax Chemsistry and Pan Asia Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pan Asia Chemical and Taiwan Hopax 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 Hopax Chemsistry are associated (or correlated) with Pan Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pan Asia Chemical has no effect on the direction of Taiwan Hopax i.e., Taiwan Hopax and Pan Asia go up and down completely randomly.
Pair Corralation between Taiwan Hopax and Pan Asia
Assuming the 90 days trading horizon Taiwan Hopax Chemsistry is expected to generate 2.09 times more return on investment than Pan Asia. However, Taiwan Hopax is 2.09 times more volatile than Pan Asia Chemical. It trades about -0.14 of its potential returns per unit of risk. Pan Asia Chemical is currently generating about -0.45 per unit of risk. If you would invest 3,965 in Taiwan Hopax Chemsistry on October 12, 2024 and sell it today you would lose (95.00) from holding Taiwan Hopax Chemsistry or give up 2.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Taiwan Hopax Chemsistry vs. Pan Asia Chemical
Performance |
| Timeline |
| Taiwan Hopax Chemsistry |
| Pan Asia Chemical |
Taiwan Hopax and Pan Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taiwan Hopax and Pan Asia
The main advantage of trading using opposite Taiwan Hopax and Pan Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taiwan Hopax position performs unexpectedly, Pan Asia 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 Pan Asia will offset losses from the drop in Pan Asia's long position.| Taiwan Hopax vs. Mechema Chemicals Int | Taiwan Hopax vs. Coremax Corp | Taiwan Hopax vs. China Steel Chemical | Taiwan Hopax vs. Wafer Works |
| Pan Asia vs. Coremax Corp | Pan Asia vs. Taiwan Hopax Chemsistry | Pan Asia vs. Delta Electronics | Pan Asia vs. China Steel Chemical |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |