Correlation Between Ju Teng and ABC Taiwan
Can any of the company-specific risk be diversified away by investing in both Ju Teng and ABC 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 Ju Teng and ABC Taiwan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ju Teng International and ABC Taiwan Electronics, you can compare the effects of market volatilities on Ju Teng and ABC 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 Ju Teng with a short position of ABC Taiwan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ju Teng and ABC Taiwan.
Diversification Opportunities for Ju Teng and ABC Taiwan
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 9136 and ABC is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Ju Teng International and ABC Taiwan Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ABC Taiwan Electronics and Ju Teng 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 Ju Teng International are associated (or correlated) with ABC Taiwan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ABC Taiwan Electronics has no effect on the direction of Ju Teng i.e., Ju Teng and ABC Taiwan go up and down completely randomly.
Pair Corralation between Ju Teng and ABC Taiwan
Assuming the 90 days trading horizon Ju Teng International is expected to under-perform the ABC Taiwan. In addition to that, Ju Teng is 1.05 times more volatile than ABC Taiwan Electronics. It trades about 0.0 of its total potential returns per unit of risk. ABC Taiwan Electronics is currently generating about 0.02 per unit of volatility. If you would invest 2,215 in ABC Taiwan Electronics on September 3, 2024 and sell it today you would earn a total of 80.00 from holding ABC Taiwan Electronics or generate 3.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ju Teng International vs. ABC Taiwan Electronics
Performance |
| Timeline |
| Ju Teng International |
| ABC Taiwan Electronics |
Ju Teng and ABC Taiwan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ju Teng and ABC Taiwan
The main advantage of trading using opposite Ju Teng and ABC Taiwan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ju Teng position performs unexpectedly, ABC 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 ABC Taiwan will offset losses from the drop in ABC Taiwan's long position.| Ju Teng vs. Cal Comp Electronics Public | Ju Teng vs. Catcher Technology Co | Ju Teng vs. Darfon Electronics Corp | Ju Teng vs. Digital China Holdings |
| ABC Taiwan vs. Hon Hai Precision | ABC Taiwan vs. Delta Electronics | ABC Taiwan vs. LARGAN Precision Co | ABC Taiwan vs. AU Optronics |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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