Correlation Between Taiwan Cogeneration and SYN Tech
Can any of the company-specific risk be diversified away by investing in both Taiwan Cogeneration and SYN Tech 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 Taiwan Cogeneration and SYN Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Taiwan Cogeneration Corp and SYN Tech Chem Pharm, you can compare the effects of market volatilities on Taiwan Cogeneration and SYN Tech 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 Taiwan Cogeneration with a short position of SYN Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taiwan Cogeneration and SYN Tech.
Diversification Opportunities for Taiwan Cogeneration and SYN Tech
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Taiwan and SYN is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Taiwan Cogeneration Corp and SYN Tech Chem Pharm in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SYN Tech Chem and Taiwan Cogeneration 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 Taiwan Cogeneration Corp are associated (or correlated) with SYN Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SYN Tech Chem has no effect on the direction of Taiwan Cogeneration i.e., Taiwan Cogeneration and SYN Tech go up and down completely randomly.
Pair Corralation between Taiwan Cogeneration and SYN Tech
Assuming the 90 days trading horizon Taiwan Cogeneration Corp is expected to under-perform the SYN Tech. In addition to that, Taiwan Cogeneration is 1.22 times more volatile than SYN Tech Chem Pharm. It trades about -0.03 of its total potential returns per unit of risk. SYN Tech Chem Pharm is currently generating about 0.1 per unit of volatility. If you would invest 9,460 in SYN Tech Chem Pharm on August 28, 2024 and sell it today you would earn a total of 510.00 from holding SYN Tech Chem Pharm or generate 5.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Taiwan Cogeneration Corp vs. SYN Tech Chem Pharm
Performance |
| Timeline |
| Taiwan Cogeneration Corp |
| SYN Tech Chem |
Taiwan Cogeneration and SYN Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taiwan Cogeneration and SYN Tech
The main advantage of trading using opposite Taiwan Cogeneration and SYN Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taiwan Cogeneration position performs unexpectedly, SYN Tech 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 SYN Tech will offset losses from the drop in SYN Tech's long position.| Taiwan Cogeneration vs. Taiwan Secom Co | Taiwan Cogeneration vs. Taiwan Shin Kong | Taiwan Cogeneration vs. Leatec Fine Ceramics | Taiwan Cogeneration vs. Information Technology Total |
| SYN Tech vs. AVer Information | SYN Tech vs. Far EasTone Telecommunications | SYN Tech vs. Transcend Information | SYN Tech vs. Chunghwa Telecom Co |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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