Correlation Between Taiwan Chinsan and Joinsoon Electronics
Can any of the company-specific risk be diversified away by investing in both Taiwan Chinsan and Joinsoon Electronics 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 Joinsoon Electronics 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 Joinsoon Electronics MFG, you can compare the effects of market volatilities on Taiwan Chinsan and Joinsoon Electronics 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 Joinsoon Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taiwan Chinsan and Joinsoon Electronics.
Diversification Opportunities for Taiwan Chinsan and Joinsoon Electronics
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Taiwan and Joinsoon is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Taiwan Chinsan Electronic and Joinsoon Electronics MFG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Joinsoon Electronics MFG 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 Joinsoon Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Joinsoon Electronics MFG has no effect on the direction of Taiwan Chinsan i.e., Taiwan Chinsan and Joinsoon Electronics go up and down completely randomly.
Pair Corralation between Taiwan Chinsan and Joinsoon Electronics
Assuming the 90 days trading horizon Taiwan Chinsan is expected to generate 2.63 times less return on investment than Joinsoon Electronics. In addition to that, Taiwan Chinsan is 2.23 times more volatile than Joinsoon Electronics MFG. It trades about 0.06 of its total potential returns per unit of risk. Joinsoon Electronics MFG is currently generating about 0.36 per unit of volatility. If you would invest 1,700 in Joinsoon Electronics MFG on December 1, 2024 and sell it today you would earn a total of 160.00 from holding Joinsoon Electronics MFG or generate 9.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Taiwan Chinsan Electronic vs. Joinsoon Electronics MFG
Performance |
| Timeline |
| Taiwan Chinsan Electronic |
| Joinsoon Electronics MFG |
Taiwan Chinsan and Joinsoon Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taiwan Chinsan and Joinsoon Electronics
The main advantage of trading using opposite Taiwan Chinsan and Joinsoon Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taiwan Chinsan position performs unexpectedly, Joinsoon Electronics 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 Joinsoon Electronics will offset losses from the drop in Joinsoon Electronics' long position.| Taiwan Chinsan vs. Hon Hai Precision | Taiwan Chinsan vs. Delta Electronics | Taiwan Chinsan vs. LARGAN Precision Co | Taiwan Chinsan vs. E Ink Holdings |
| Joinsoon Electronics vs. Everlight Electronics Co | Joinsoon Electronics vs. Yuanta Financial Holdings | Joinsoon Electronics vs. Unitech Electronics Co | Joinsoon Electronics vs. Microelectronics Technology |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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