Correlation Between Taiwan Cogeneration and Taiwan Sakura
Can any of the company-specific risk be diversified away by investing in both Taiwan Cogeneration and Taiwan Sakura 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 Taiwan Sakura 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 Taiwan Sakura Corp, you can compare the effects of market volatilities on Taiwan Cogeneration and Taiwan Sakura 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 Taiwan Sakura. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taiwan Cogeneration and Taiwan Sakura.
Diversification Opportunities for Taiwan Cogeneration and Taiwan Sakura
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Taiwan and Taiwan is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Taiwan Cogeneration Corp and Taiwan Sakura Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taiwan Sakura Corp 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 Taiwan Sakura. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taiwan Sakura Corp has no effect on the direction of Taiwan Cogeneration i.e., Taiwan Cogeneration and Taiwan Sakura go up and down completely randomly.
Pair Corralation between Taiwan Cogeneration and Taiwan Sakura
Assuming the 90 days trading horizon Taiwan Cogeneration Corp is expected to under-perform the Taiwan Sakura. In addition to that, Taiwan Cogeneration is 1.02 times more volatile than Taiwan Sakura Corp. It trades about -0.04 of its total potential returns per unit of risk. Taiwan Sakura Corp is currently generating about -0.01 per unit of volatility. If you would invest 8,640 in Taiwan Sakura Corp on January 18, 2025 and sell it today you would lose (270.00) from holding Taiwan Sakura Corp or give up 3.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Taiwan Cogeneration Corp vs. Taiwan Sakura Corp
Performance |
| Timeline |
| Taiwan Cogeneration Corp |
| Taiwan Sakura Corp |
Taiwan Cogeneration and Taiwan Sakura Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taiwan Cogeneration and Taiwan Sakura
The main advantage of trading using opposite Taiwan Cogeneration and Taiwan Sakura positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taiwan Cogeneration position performs unexpectedly, Taiwan Sakura 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 Sakura will offset losses from the drop in Taiwan Sakura's long position.| Taiwan Cogeneration vs. Great Taipei Gas | Taiwan Cogeneration vs. Taiwan Cement Corp | Taiwan Cogeneration vs. Mega Financial Holding | Taiwan Cogeneration vs. First Financial Holding |
| Taiwan Sakura vs. Yulon Finance Corp | Taiwan Sakura vs. Taiwan Secom Co | Taiwan Sakura vs. Pou Chen Corp | Taiwan Sakura vs. Taiwan Hon Chuan |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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