Correlation Between Wah Hong and Tait Marketing
Can any of the company-specific risk be diversified away by investing in both Wah Hong and Tait Marketing 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 Wah Hong and Tait Marketing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wah Hong Industrial and Tait Marketing Distribution, you can compare the effects of market volatilities on Wah Hong and Tait Marketing 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 Wah Hong with a short position of Tait Marketing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wah Hong and Tait Marketing.
Diversification Opportunities for Wah Hong and Tait Marketing
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Wah and Tait is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Wah Hong Industrial and Tait Marketing Distribution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tait Marketing Distr and Wah Hong 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 Wah Hong Industrial are associated (or correlated) with Tait Marketing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tait Marketing Distr has no effect on the direction of Wah Hong i.e., Wah Hong and Tait Marketing go up and down completely randomly.
Pair Corralation between Wah Hong and Tait Marketing
Assuming the 90 days trading horizon Wah Hong Industrial is expected to generate 1.55 times more return on investment than Tait Marketing. However, Wah Hong is 1.55 times more volatile than Tait Marketing Distribution. It trades about 0.06 of its potential returns per unit of risk. Tait Marketing Distribution is currently generating about 0.04 per unit of risk. If you would invest 2,695 in Wah Hong Industrial on September 3, 2024 and sell it today you would earn a total of 1,975 from holding Wah Hong Industrial or generate 73.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wah Hong Industrial vs. Tait Marketing Distribution
Performance |
| Timeline |
| Wah Hong Industrial |
| Tait Marketing Distr |
Wah Hong and Tait Marketing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wah Hong and Tait Marketing
The main advantage of trading using opposite Wah Hong and Tait Marketing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wah Hong position performs unexpectedly, Tait Marketing 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 Tait Marketing will offset losses from the drop in Tait Marketing's long position.| Wah Hong vs. Hon Hai Precision | Wah Hong vs. Delta Electronics | Wah Hong vs. LARGAN Precision Co | Wah Hong vs. AU Optronics |
| Tait Marketing vs. YuantaP shares Taiwan Electronics | Tait Marketing vs. YuantaP shares Taiwan Top | Tait Marketing vs. YuantaP shares Taiwan Mid Cap | Tait Marketing vs. Fubon MSCI Taiwan |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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