Correlation Between Taiflex Scientific and Emerging Display
Can any of the company-specific risk be diversified away by investing in both Taiflex Scientific and Emerging Display 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 Taiflex Scientific and Emerging Display into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Taiflex Scientific Co and Emerging Display Technologies, you can compare the effects of market volatilities on Taiflex Scientific and Emerging Display 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 Taiflex Scientific with a short position of Emerging Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taiflex Scientific and Emerging Display.
Diversification Opportunities for Taiflex Scientific and Emerging Display
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Taiflex and Emerging is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Taiflex Scientific Co and Emerging Display Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerging Display Tec and Taiflex Scientific 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 Taiflex Scientific Co are associated (or correlated) with Emerging Display. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerging Display Tec has no effect on the direction of Taiflex Scientific i.e., Taiflex Scientific and Emerging Display go up and down completely randomly.
Pair Corralation between Taiflex Scientific and Emerging Display
Assuming the 90 days trading horizon Taiflex Scientific is expected to generate 1.55 times less return on investment than Emerging Display. But when comparing it to its historical volatility, Taiflex Scientific Co is 1.11 times less risky than Emerging Display. It trades about 0.03 of its potential returns per unit of risk. Emerging Display Technologies is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,025 in Emerging Display Technologies on September 3, 2024 and sell it today you would earn a total of 675.00 from holding Emerging Display Technologies or generate 33.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Taiflex Scientific Co vs. Emerging Display Technologies
Performance |
| Timeline |
| Taiflex Scientific |
| Emerging Display Tec |
Taiflex Scientific and Emerging Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taiflex Scientific and Emerging Display
The main advantage of trading using opposite Taiflex Scientific and Emerging Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taiflex Scientific position performs unexpectedly, Emerging Display 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 Emerging Display will offset losses from the drop in Emerging Display's long position.| Taiflex Scientific vs. Flexium Interconnect | Taiflex Scientific vs. Career Technology MFG | Taiflex Scientific vs. Powertech Technology | Taiflex Scientific vs. Elite Material Co |
| Emerging Display vs. Taiwan Semiconductor Manufacturing | Emerging Display vs. Yang Ming Marine | Emerging Display vs. ASE Industrial Holding | Emerging Display vs. AU Optronics |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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