Correlation Between Tai Tung and AVer Information
Can any of the company-specific risk be diversified away by investing in both Tai Tung and AVer Information 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 Tai Tung and AVer Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tai Tung Communication and AVer Information, you can compare the effects of market volatilities on Tai Tung and AVer Information 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 Tai Tung with a short position of AVer Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tai Tung and AVer Information.
Diversification Opportunities for Tai Tung and AVer Information
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Tai and AVer is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Tai Tung Communication and AVer Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AVer Information and Tai Tung 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 Tai Tung Communication are associated (or correlated) with AVer Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AVer Information has no effect on the direction of Tai Tung i.e., Tai Tung and AVer Information go up and down completely randomly.
Pair Corralation between Tai Tung and AVer Information
Assuming the 90 days trading horizon Tai Tung Communication is expected to under-perform the AVer Information. But the stock apears to be less risky and, when comparing its historical volatility, Tai Tung Communication is 1.08 times less risky than AVer Information. The stock trades about -0.26 of its potential returns per unit of risk. The AVer Information is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 4,050 in AVer Information on October 16, 2024 and sell it today you would lose (70.00) from holding AVer Information or give up 1.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Tai Tung Communication vs. AVer Information
Performance |
| Timeline |
| Tai Tung Communication |
| AVer Information |
Tai Tung and AVer Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tai Tung and AVer Information
The main advantage of trading using opposite Tai Tung and AVer Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tai Tung position performs unexpectedly, AVer Information 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 AVer Information will offset losses from the drop in AVer Information's long position.| Tai Tung vs. Zinwell | Tai Tung vs. Mercuries Life Insurance | Tai Tung vs. Darwin Precisions Corp | Tai Tung vs. Jinli Group Holdings |
| AVer Information vs. O Bank Co | AVer Information vs. Softstar Entertainment | AVer Information vs. Shinkong Insurance Co | AVer Information vs. Taichung Commercial Bank |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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