Correlation Between Tatung System and Digital China
Can any of the company-specific risk be diversified away by investing in both Tatung System and Digital China 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 Tatung System and Digital China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tatung System Technologies and Digital China Holdings, you can compare the effects of market volatilities on Tatung System and Digital China 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 Tatung System with a short position of Digital China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tatung System and Digital China.
Diversification Opportunities for Tatung System and Digital China
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Tatung and Digital is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Tatung System Technologies and Digital China Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digital China Holdings and Tatung System 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 Tatung System Technologies are associated (or correlated) with Digital China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digital China Holdings has no effect on the direction of Tatung System i.e., Tatung System and Digital China go up and down completely randomly.
Pair Corralation between Tatung System and Digital China
Assuming the 90 days trading horizon Tatung System Technologies is expected to under-perform the Digital China. But the stock apears to be less risky and, when comparing its historical volatility, Tatung System Technologies is 1.42 times less risky than Digital China. The stock trades about -0.27 of its potential returns per unit of risk. The Digital China Holdings is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 584.00 in Digital China Holdings on August 24, 2024 and sell it today you would earn a total of 98.00 from holding Digital China Holdings or generate 16.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tatung System Technologies vs. Digital China Holdings
Performance |
| Timeline |
| Tatung System Techno |
| Digital China Holdings |
Tatung System and Digital China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tatung System and Digital China
The main advantage of trading using opposite Tatung System and Digital China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tatung System position performs unexpectedly, Digital China 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 Digital China will offset losses from the drop in Digital China's long position.| Tatung System vs. Digital China Holdings | Tatung System vs. Acer E Enabling Service | Tatung System vs. Sysage Technology Co | Tatung System vs. Green World Fintech |
| Digital China vs. Acer E Enabling Service | Digital China vs. Sysage Technology Co | Digital China vs. Green World Fintech | Digital China vs. Genesis 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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