Correlation Between Taiwan Chinsan and Advantech
Can any of the company-specific risk be diversified away by investing in both Taiwan Chinsan and Advantech 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 Chinsan and Advantech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Taiwan Chinsan Electronic and Advantech Co, you can compare the effects of market volatilities on Taiwan Chinsan and Advantech 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 Chinsan with a short position of Advantech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taiwan Chinsan and Advantech.
Diversification Opportunities for Taiwan Chinsan and Advantech
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Taiwan and Advantech is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Taiwan Chinsan Electronic and Advantech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advantech and Taiwan Chinsan 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 Chinsan Electronic are associated (or correlated) with Advantech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advantech has no effect on the direction of Taiwan Chinsan i.e., Taiwan Chinsan and Advantech go up and down completely randomly.
Pair Corralation between Taiwan Chinsan and Advantech
Assuming the 90 days trading horizon Taiwan Chinsan Electronic is expected to under-perform the Advantech. In addition to that, Taiwan Chinsan is 2.29 times more volatile than Advantech Co. It trades about -0.03 of its total potential returns per unit of risk. Advantech Co is currently generating about 0.11 per unit of volatility. If you would invest 34,950 in Advantech Co on October 26, 2024 and sell it today you would earn a total of 2,950 from holding Advantech Co or generate 8.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Taiwan Chinsan Electronic vs. Advantech Co
Performance |
| Timeline |
| Taiwan Chinsan Electronic |
| Advantech |
Taiwan Chinsan and Advantech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taiwan Chinsan and Advantech
The main advantage of trading using opposite Taiwan Chinsan and Advantech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taiwan Chinsan position performs unexpectedly, Advantech 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 Advantech will offset losses from the drop in Advantech's long position.| Taiwan Chinsan vs. Advantech Co | Taiwan Chinsan vs. IEI Integration Corp | Taiwan Chinsan vs. Flytech Technology Co | Taiwan Chinsan vs. Ennoconn Corp |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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