Correlation Between Taiwan Chinsan and Poya International
Can any of the company-specific risk be diversified away by investing in both Taiwan Chinsan and Poya International 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 Poya International 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 Poya International Co, you can compare the effects of market volatilities on Taiwan Chinsan and Poya International 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 Poya International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taiwan Chinsan and Poya International.
Diversification Opportunities for Taiwan Chinsan and Poya International
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Taiwan and Poya is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Taiwan Chinsan Electronic and Poya International Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Poya International 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 Poya International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Poya International has no effect on the direction of Taiwan Chinsan i.e., Taiwan Chinsan and Poya International go up and down completely randomly.
Pair Corralation between Taiwan Chinsan and Poya International
Assuming the 90 days trading horizon Taiwan Chinsan Electronic is expected to generate 3.33 times more return on investment than Poya International. However, Taiwan Chinsan is 3.33 times more volatile than Poya International Co. It trades about 0.15 of its potential returns per unit of risk. Poya International Co is currently generating about -0.15 per unit of risk. If you would invest 3,435 in Taiwan Chinsan Electronic on September 12, 2024 and sell it today you would earn a total of 1,135 from holding Taiwan Chinsan Electronic or generate 33.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Taiwan Chinsan Electronic vs. Poya International Co
Performance |
| Timeline |
| Taiwan Chinsan Electronic |
| Poya International |
Taiwan Chinsan and Poya International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taiwan Chinsan and Poya International
The main advantage of trading using opposite Taiwan Chinsan and Poya International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taiwan Chinsan position performs unexpectedly, Poya International 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 Poya International will offset losses from the drop in Poya International's long position.| Taiwan Chinsan vs. ANJI Technology Co | Taiwan Chinsan vs. Emerging Display Technologies | Taiwan Chinsan vs. U Tech Media Corp | Taiwan Chinsan vs. Ruentex Development Co |
| Poya International vs. Taiwan FamilyMart Co | Poya International vs. President Chain Store | Poya International vs. Eclat Textile Co | Poya International vs. Aspeed 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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