Correlation Between Taiwan Chinsan and Jetway Information
Can any of the company-specific risk be diversified away by investing in both Taiwan Chinsan and Jetway Information 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 Jetway Information 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 Jetway Information Co, you can compare the effects of market volatilities on Taiwan Chinsan and Jetway Information 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 Jetway Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taiwan Chinsan and Jetway Information.
Diversification Opportunities for Taiwan Chinsan and Jetway Information
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Taiwan and Jetway is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Taiwan Chinsan Electronic and Jetway Information Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jetway Information 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 Jetway Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jetway Information has no effect on the direction of Taiwan Chinsan i.e., Taiwan Chinsan and Jetway Information go up and down completely randomly.
Pair Corralation between Taiwan Chinsan and Jetway Information
Assuming the 90 days trading horizon Taiwan Chinsan Electronic is expected to generate 1.01 times more return on investment than Jetway Information. However, Taiwan Chinsan is 1.01 times more volatile than Jetway Information Co. It trades about -0.2 of its potential returns per unit of risk. Jetway Information Co is currently generating about -0.35 per unit of risk. If you would invest 3,855 in Taiwan Chinsan Electronic on November 7, 2024 and sell it today you would lose (305.00) from holding Taiwan Chinsan Electronic or give up 7.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Taiwan Chinsan Electronic vs. Jetway Information Co
Performance |
| Timeline |
| Taiwan Chinsan Electronic |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
| Jetway Information |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Taiwan Chinsan and Jetway Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taiwan Chinsan and Jetway Information
The main advantage of trading using opposite Taiwan Chinsan and Jetway Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taiwan Chinsan position performs unexpectedly, Jetway Information 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 Jetway Information will offset losses from the drop in Jetway Information's long position.The idea behind Taiwan Chinsan Electronic and Jetway Information Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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