Correlation Between Taiwan Chinsan and Asia Tech
Can any of the company-specific risk be diversified away by investing in both Taiwan Chinsan and Asia Tech 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 Asia Tech 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 Asia Tech Image, you can compare the effects of market volatilities on Taiwan Chinsan and Asia Tech 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 Asia Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taiwan Chinsan and Asia Tech.
Diversification Opportunities for Taiwan Chinsan and Asia Tech
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Taiwan and Asia is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Taiwan Chinsan Electronic and Asia Tech Image in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Tech Image 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 Asia Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Tech Image has no effect on the direction of Taiwan Chinsan i.e., Taiwan Chinsan and Asia Tech go up and down completely randomly.
Pair Corralation between Taiwan Chinsan and Asia Tech
Assuming the 90 days trading horizon Taiwan Chinsan Electronic is expected to generate 2.52 times more return on investment than Asia Tech. However, Taiwan Chinsan is 2.52 times more volatile than Asia Tech Image. It trades about 0.24 of its potential returns per unit of risk. Asia Tech Image is currently generating about 0.14 per unit of risk. If you would invest 3,455 in Taiwan Chinsan Electronic on September 15, 2024 and sell it today you would earn a total of 1,065 from holding Taiwan Chinsan Electronic or generate 30.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Taiwan Chinsan Electronic vs. Asia Tech Image
Performance |
| Timeline |
| Taiwan Chinsan Electronic |
| Asia Tech Image |
Taiwan Chinsan and Asia Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taiwan Chinsan and Asia Tech
The main advantage of trading using opposite Taiwan Chinsan and Asia Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taiwan Chinsan position performs unexpectedly, Asia Tech 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 Asia Tech will offset losses from the drop in Asia Tech's long position.| Taiwan Chinsan vs. Chun Yuan Steel | Taiwan Chinsan vs. Excelsior Medical Co | Taiwan Chinsan vs. ECOVE Environment Corp | Taiwan Chinsan vs. Microelectronics Technology |
| Asia Tech vs. GameSparcs Co | Asia Tech vs. LandMark Optoelectronics | Asia Tech vs. Chinese Gamer International | Asia Tech vs. Century Iron And |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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