Correlation Between Hsin Ba and Ta Yih
Can any of the company-specific risk be diversified away by investing in both Hsin Ba and Ta Yih 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 Hsin Ba and Ta Yih into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hsin Ba Ba and Ta Yih Industrial, you can compare the effects of market volatilities on Hsin Ba and Ta Yih 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 Hsin Ba with a short position of Ta Yih. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hsin Ba and Ta Yih.
Diversification Opportunities for Hsin Ba and Ta Yih
Poor diversification
The 3 months correlation between Hsin and 1521 is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Hsin Ba Ba and Ta Yih Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ta Yih Industrial and Hsin Ba 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 Hsin Ba Ba are associated (or correlated) with Ta Yih. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ta Yih Industrial has no effect on the direction of Hsin Ba i.e., Hsin Ba and Ta Yih go up and down completely randomly.
Pair Corralation between Hsin Ba and Ta Yih
Assuming the 90 days trading horizon Hsin Ba Ba is expected to generate 2.79 times more return on investment than Ta Yih. However, Hsin Ba is 2.79 times more volatile than Ta Yih Industrial. It trades about 0.1 of its potential returns per unit of risk. Ta Yih Industrial is currently generating about -0.05 per unit of risk. If you would invest 7,550 in Hsin Ba Ba on September 3, 2024 and sell it today you would earn a total of 5,250 from holding Hsin Ba Ba or generate 69.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hsin Ba Ba vs. Ta Yih Industrial
Performance |
| Timeline |
| Hsin Ba Ba |
| Ta Yih Industrial |
Hsin Ba and Ta Yih Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hsin Ba and Ta Yih
The main advantage of trading using opposite Hsin Ba and Ta Yih positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hsin Ba position performs unexpectedly, Ta Yih 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 Ta Yih will offset losses from the drop in Ta Yih's long position.| Hsin Ba vs. Universal Microelectronics Co | Hsin Ba vs. AVerMedia Technologies | Hsin Ba vs. Symtek Automation Asia | Hsin Ba vs. WiseChip Semiconductor |
| Ta Yih vs. TYC Brother Industrial | Ta Yih vs. Basso Industry Corp | Ta Yih vs. Hota Industrial Mfg | Ta Yih vs. Tong Yang Industry |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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