Correlation Between E Ink and Taiwan Chinsan
Can any of the company-specific risk be diversified away by investing in both E Ink and Taiwan Chinsan 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 E Ink and Taiwan Chinsan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between E Ink Holdings and Taiwan Chinsan Electronic, you can compare the effects of market volatilities on E Ink and Taiwan Chinsan 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 E Ink with a short position of Taiwan Chinsan. Check out your portfolio center. Please also check ongoing floating volatility patterns of E Ink and Taiwan Chinsan.
Diversification Opportunities for E Ink and Taiwan Chinsan
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 8069 and Taiwan is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding E Ink Holdings and Taiwan Chinsan Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taiwan Chinsan Electronic and E Ink 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 E Ink Holdings are associated (or correlated) with Taiwan Chinsan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taiwan Chinsan Electronic has no effect on the direction of E Ink i.e., E Ink and Taiwan Chinsan go up and down completely randomly.
Pair Corralation between E Ink and Taiwan Chinsan
Assuming the 90 days trading horizon E Ink Holdings is expected to generate 1.47 times more return on investment than Taiwan Chinsan. However, E Ink is 1.47 times more volatile than Taiwan Chinsan Electronic. It trades about 0.05 of its potential returns per unit of risk. Taiwan Chinsan Electronic is currently generating about 0.03 per unit of risk. If you would invest 16,676 in E Ink Holdings on October 11, 2024 and sell it today you would earn a total of 11,024 from holding E Ink Holdings or generate 66.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
E Ink Holdings vs. Taiwan Chinsan Electronic
Performance |
| Timeline |
| E Ink Holdings |
| Taiwan Chinsan Electronic |
E Ink and Taiwan Chinsan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with E Ink and Taiwan Chinsan
The main advantage of trading using opposite E Ink and Taiwan Chinsan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if E Ink position performs unexpectedly, Taiwan Chinsan 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 Chinsan will offset losses from the drop in Taiwan Chinsan's long position.| E Ink vs. Unimicron Technology Corp | E Ink vs. Innolux Corp | E Ink vs. Delta Electronics | E Ink vs. Novatek Microelectronics Corp |
| Taiwan Chinsan vs. Hon Hai Precision | Taiwan Chinsan vs. Delta Electronics | Taiwan Chinsan vs. LARGAN Precision Co | Taiwan Chinsan vs. E Ink Holdings |
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 Stocks Directory module to find actively traded stocks across global markets.
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