Correlation Between Nan Ya and Taiwan Union
Can any of the company-specific risk be diversified away by investing in both Nan Ya and Taiwan Union 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 Nan Ya and Taiwan Union into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nan Ya Printed and Taiwan Union Technology, you can compare the effects of market volatilities on Nan Ya and Taiwan Union 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 Nan Ya with a short position of Taiwan Union. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nan Ya and Taiwan Union.
Diversification Opportunities for Nan Ya and Taiwan Union
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nan and Taiwan is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Nan Ya Printed and Taiwan Union Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taiwan Union Technology and Nan Ya 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 Nan Ya Printed are associated (or correlated) with Taiwan Union. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taiwan Union Technology has no effect on the direction of Nan Ya i.e., Nan Ya and Taiwan Union go up and down completely randomly.
Pair Corralation between Nan Ya and Taiwan Union
Assuming the 90 days trading horizon Nan Ya Printed is expected to generate 2.24 times more return on investment than Taiwan Union. However, Nan Ya is 2.24 times more volatile than Taiwan Union Technology. It trades about 0.26 of its potential returns per unit of risk. Taiwan Union Technology is currently generating about -0.19 per unit of risk. If you would invest 11,100 in Nan Ya Printed on October 21, 2024 and sell it today you would earn a total of 2,200 from holding Nan Ya Printed or generate 19.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nan Ya Printed vs. Taiwan Union Technology
Performance |
| Timeline |
| Nan Ya Printed |
| Taiwan Union Technology |
Nan Ya and Taiwan Union Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nan Ya and Taiwan Union
The main advantage of trading using opposite Nan Ya and Taiwan Union positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nan Ya position performs unexpectedly, Taiwan Union 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 Union will offset losses from the drop in Taiwan Union's long position.| Nan Ya vs. Unimicron Technology Corp | Nan Ya vs. Kinsus Interconnect Technology | Nan Ya vs. Novatek Microelectronics Corp | Nan Ya vs. Delta Electronics |
| Taiwan Union vs. Unimicron Technology Corp | Taiwan Union vs. Nan Ya Printed | Taiwan Union vs. Elite Material Co | Taiwan Union vs. Compeq Manufacturing Co |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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