Correlation Between Taiwan Cogeneration and National Petroleum
Can any of the company-specific risk be diversified away by investing in both Taiwan Cogeneration and National Petroleum 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 National Petroleum 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 National Petroleum Co, you can compare the effects of market volatilities on Taiwan Cogeneration and National Petroleum 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 National Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taiwan Cogeneration and National Petroleum.
Diversification Opportunities for Taiwan Cogeneration and National Petroleum
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Taiwan and National is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Taiwan Cogeneration Corp and National Petroleum Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Petroleum 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 National Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Petroleum has no effect on the direction of Taiwan Cogeneration i.e., Taiwan Cogeneration and National Petroleum go up and down completely randomly.
Pair Corralation between Taiwan Cogeneration and National Petroleum
Assuming the 90 days trading horizon Taiwan Cogeneration Corp is expected to generate 1.21 times more return on investment than National Petroleum. However, Taiwan Cogeneration is 1.21 times more volatile than National Petroleum Co. It trades about 0.04 of its potential returns per unit of risk. National Petroleum Co is currently generating about 0.04 per unit of risk. If you would invest 3,235 in Taiwan Cogeneration Corp on September 12, 2024 and sell it today you would earn a total of 1,015 from holding Taiwan Cogeneration Corp or generate 31.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Taiwan Cogeneration Corp vs. National Petroleum Co
Performance |
| Timeline |
| Taiwan Cogeneration Corp |
| National Petroleum |
Taiwan Cogeneration and National Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taiwan Cogeneration and National Petroleum
The main advantage of trading using opposite Taiwan Cogeneration and National Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taiwan Cogeneration position performs unexpectedly, National Petroleum 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 National Petroleum will offset losses from the drop in National Petroleum'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 |
| National Petroleum vs. Taiwan Shin Kong | National Petroleum vs. Taiwan Secom Co | National Petroleum vs. Great Taipei Gas | National Petroleum vs. CTCI Corp |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |