Correlation Between Posiflex Technology and Zimmite Taiwan
Can any of the company-specific risk be diversified away by investing in both Posiflex Technology and Zimmite Taiwan 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 Posiflex Technology and Zimmite Taiwan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Posiflex Technology and Zimmite Taiwan, you can compare the effects of market volatilities on Posiflex Technology and Zimmite Taiwan 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 Posiflex Technology with a short position of Zimmite Taiwan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Posiflex Technology and Zimmite Taiwan.
Diversification Opportunities for Posiflex Technology and Zimmite Taiwan
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Posiflex and Zimmite is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Posiflex Technology and Zimmite Taiwan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zimmite Taiwan and Posiflex Technology 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 Posiflex Technology are associated (or correlated) with Zimmite Taiwan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zimmite Taiwan has no effect on the direction of Posiflex Technology i.e., Posiflex Technology and Zimmite Taiwan go up and down completely randomly.
Pair Corralation between Posiflex Technology and Zimmite Taiwan
Assuming the 90 days trading horizon Posiflex Technology is expected to generate 3.88 times more return on investment than Zimmite Taiwan. However, Posiflex Technology is 3.88 times more volatile than Zimmite Taiwan. It trades about 0.3 of its potential returns per unit of risk. Zimmite Taiwan is currently generating about -0.03 per unit of risk. If you would invest 18,050 in Posiflex Technology on September 4, 2024 and sell it today you would earn a total of 13,600 from holding Posiflex Technology or generate 75.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Posiflex Technology vs. Zimmite Taiwan
Performance |
| Timeline |
| Posiflex Technology |
| Zimmite Taiwan |
Posiflex Technology and Zimmite Taiwan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Posiflex Technology and Zimmite Taiwan
The main advantage of trading using opposite Posiflex Technology and Zimmite Taiwan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Posiflex Technology position performs unexpectedly, Zimmite Taiwan 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 Zimmite Taiwan will offset losses from the drop in Zimmite Taiwan's long position.| Posiflex Technology vs. Taiwan Semiconductor Manufacturing | Posiflex Technology vs. Yang Ming Marine | Posiflex Technology vs. AU Optronics | Posiflex Technology vs. Nan Ya Plastics |
| Zimmite Taiwan vs. United Radiant Technology | Zimmite Taiwan vs. Posiflex Technology | Zimmite Taiwan vs. Microtips Technology | Zimmite Taiwan vs. Dynamic Medical Technologies |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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