Correlation Between Great Taipei and Chia Her
Can any of the company-specific risk be diversified away by investing in both Great Taipei and Chia Her 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 Great Taipei and Chia Her into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Great Taipei Gas and Chia Her Industrial, you can compare the effects of market volatilities on Great Taipei and Chia Her 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 Great Taipei with a short position of Chia Her. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great Taipei and Chia Her.
Diversification Opportunities for Great Taipei and Chia Her
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Great and Chia is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Great Taipei Gas and Chia Her Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chia Her Industrial and Great Taipei 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 Great Taipei Gas are associated (or correlated) with Chia Her. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chia Her Industrial has no effect on the direction of Great Taipei i.e., Great Taipei and Chia Her go up and down completely randomly.
Pair Corralation between Great Taipei and Chia Her
Assuming the 90 days trading horizon Great Taipei is expected to generate 56.61 times less return on investment than Chia Her. But when comparing it to its historical volatility, Great Taipei Gas is 7.81 times less risky than Chia Her. It trades about 0.01 of its potential returns per unit of risk. Chia Her Industrial is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,595 in Chia Her Industrial on September 3, 2024 and sell it today you would earn a total of 780.00 from holding Chia Her Industrial or generate 48.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Great Taipei Gas vs. Chia Her Industrial
Performance |
| Timeline |
| Great Taipei Gas |
| Chia Her Industrial |
Great Taipei and Chia Her Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Great Taipei and Chia Her
The main advantage of trading using opposite Great Taipei and Chia Her positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great Taipei position performs unexpectedly, Chia Her 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 Chia Her will offset losses from the drop in Chia Her's long position.| Great Taipei vs. Taiwan Secom Co | Great Taipei vs. Taiwan Shin Kong | Great Taipei vs. Taiwan Cogeneration Corp | Great Taipei vs. Shin Shin Natural |
| Chia Her vs. Carnival Industrial Corp | Chia Her vs. I Hwa Industrial Co | Chia Her vs. Hung Chou Fiber | Chia Her vs. Tung Ho Textile |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |