Correlation Between Great Computer and Taiwan Cement
Can any of the company-specific risk be diversified away by investing in both Great Computer and Taiwan Cement 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 Great Computer and Taiwan Cement into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Great Computer and Taiwan Cement Corp, you can compare the effects of market volatilities on Great Computer and Taiwan Cement 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 Great Computer with a short position of Taiwan Cement. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great Computer and Taiwan Cement.
Diversification Opportunities for Great Computer and Taiwan Cement
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Great and Taiwan is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Great Computer and Taiwan Cement Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taiwan Cement Corp and Great Computer 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 Great Computer are associated (or correlated) with Taiwan Cement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taiwan Cement Corp has no effect on the direction of Great Computer i.e., Great Computer and Taiwan Cement go up and down completely randomly.
Pair Corralation between Great Computer and Taiwan Cement
Assuming the 90 days trading horizon Great Computer is expected to generate 626.97 times more return on investment than Taiwan Cement. However, Great Computer is 626.97 times more volatile than Taiwan Cement Corp. It trades about 0.08 of its potential returns per unit of risk. Taiwan Cement Corp is currently generating about 0.0 per unit of risk. If you would invest 1,515 in Great Computer on September 1, 2024 and sell it today you would earn a total of 485.00 from holding Great Computer or generate 32.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Great Computer vs. Taiwan Cement Corp
Performance |
| Timeline |
| Great Computer |
| Taiwan Cement Corp |
Great Computer and Taiwan Cement Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Great Computer and Taiwan Cement
The main advantage of trading using opposite Great Computer and Taiwan Cement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great Computer position performs unexpectedly, Taiwan Cement 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 Cement will offset losses from the drop in Taiwan Cement's long position.| Great Computer vs. Chi Hua Fitness | Great Computer vs. CHC Healthcare Group | Great Computer vs. First Hotel Co | Great Computer vs. SS Healthcare Holding |
| Taiwan Cement vs. LandMark Optoelectronics | Taiwan Cement vs. FDC International Hotels | Taiwan Cement vs. Microelectronics Technology | Taiwan Cement vs. Voltronic Power 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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