Correlation Between Taiwan Chinsan and Taiwan Weighted
Can any of the company-specific risk be diversified away by investing in both Taiwan Chinsan and Taiwan Weighted 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 Taiwan Weighted 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 Taiwan Weighted, you can compare the effects of market volatilities on Taiwan Chinsan and Taiwan Weighted 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 Taiwan Weighted. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taiwan Chinsan and Taiwan Weighted.
Diversification Opportunities for Taiwan Chinsan and Taiwan Weighted
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Taiwan and Taiwan is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Taiwan Chinsan Electronic and Taiwan Weighted in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taiwan Weighted 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 Taiwan Weighted. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taiwan Weighted has no effect on the direction of Taiwan Chinsan i.e., Taiwan Chinsan and Taiwan Weighted go up and down completely randomly.
Pair Corralation between Taiwan Chinsan and Taiwan Weighted
Assuming the 90 days trading horizon Taiwan Chinsan Electronic is expected to generate 3.91 times more return on investment than Taiwan Weighted. However, Taiwan Chinsan is 3.91 times more volatile than Taiwan Weighted. It trades about 0.06 of its potential returns per unit of risk. Taiwan Weighted is currently generating about 0.03 per unit of risk. If you would invest 3,475 in Taiwan Chinsan Electronic on October 26, 2024 and sell it today you would earn a total of 335.00 from holding Taiwan Chinsan Electronic or generate 9.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.41% |
| Values | Daily Returns |
Taiwan Chinsan Electronic vs. Taiwan Weighted
Performance |
| Timeline |
Taiwan Chinsan and Taiwan Weighted Volatility Contrast
Predicted Return Density |
| Returns |
Taiwan Chinsan Electronic
Pair trading matchups for Taiwan Chinsan
Taiwan Weighted
Pair trading matchups for Taiwan Weighted
Pair Trading with Taiwan Chinsan and Taiwan Weighted
The main advantage of trading using opposite Taiwan Chinsan and Taiwan Weighted positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taiwan Chinsan position performs unexpectedly, Taiwan Weighted 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 Taiwan Weighted will offset losses from the drop in Taiwan Weighted'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 |
| Taiwan Weighted vs. Sea Sonic Electronics | Taiwan Weighted vs. Everlight Chemical Industrial | Taiwan Weighted vs. LandMark Optoelectronics | Taiwan Weighted vs. Taiwan Chinsan Electronic |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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