Correlation Between Taiwan Hopax and Global Brands
Can any of the company-specific risk be diversified away by investing in both Taiwan Hopax and Global Brands 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 Global Brands 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 Global Brands Manufacture, you can compare the effects of market volatilities on Taiwan Hopax and Global Brands 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 Global Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taiwan Hopax and Global Brands.
Diversification Opportunities for Taiwan Hopax and Global Brands
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Taiwan and Global is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Taiwan Hopax Chemsistry and Global Brands Manufacture in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Brands Manufacture 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 Global Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Brands Manufacture has no effect on the direction of Taiwan Hopax i.e., Taiwan Hopax and Global Brands go up and down completely randomly.
Pair Corralation between Taiwan Hopax and Global Brands
Assuming the 90 days trading horizon Taiwan Hopax Chemsistry is expected to under-perform the Global Brands. But the stock apears to be less risky and, when comparing its historical volatility, Taiwan Hopax Chemsistry is 1.56 times less risky than Global Brands. The stock trades about -0.01 of its potential returns per unit of risk. The Global Brands Manufacture is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 4,220 in Global Brands Manufacture on September 12, 2024 and sell it today you would earn a total of 1,190 from holding Global Brands Manufacture or generate 28.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Taiwan Hopax Chemsistry vs. Global Brands Manufacture
Performance |
| Timeline |
| Taiwan Hopax Chemsistry |
| Global Brands Manufacture |
Taiwan Hopax and Global Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taiwan Hopax and Global Brands
The main advantage of trading using opposite Taiwan Hopax and Global Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taiwan Hopax position performs unexpectedly, Global Brands 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 Global Brands will offset losses from the drop in Global Brands' long position.| Taiwan Hopax vs. Mechema Chemicals Int | Taiwan Hopax vs. Coremax Corp | Taiwan Hopax vs. China Steel Chemical | Taiwan Hopax vs. Wafer Works |
| Global Brands vs. HannStar Board Corp | Global Brands vs. ITEQ Corp | Global Brands vs. Unitech Printed Circuit | Global Brands vs. Career Technology MFG |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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