Correlation Between Great Taipei and SYN Tech
Can any of the company-specific risk be diversified away by investing in both Great Taipei and SYN Tech 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 SYN Tech 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 SYN Tech Chem Pharm, you can compare the effects of market volatilities on Great Taipei and SYN Tech 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 SYN Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great Taipei and SYN Tech.
Diversification Opportunities for Great Taipei and SYN Tech
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Great and SYN is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Great Taipei Gas and SYN Tech Chem Pharm in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SYN Tech Chem 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 SYN Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SYN Tech Chem has no effect on the direction of Great Taipei i.e., Great Taipei and SYN Tech go up and down completely randomly.
Pair Corralation between Great Taipei and SYN Tech
Assuming the 90 days trading horizon Great Taipei is expected to generate 5.9 times less return on investment than SYN Tech. But when comparing it to its historical volatility, Great Taipei Gas is 4.1 times less risky than SYN Tech. It trades about 0.22 of its potential returns per unit of risk. SYN Tech Chem Pharm is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 9,310 in SYN Tech Chem Pharm on August 30, 2024 and sell it today you would earn a total of 650.00 from holding SYN Tech Chem Pharm or generate 6.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Great Taipei Gas vs. SYN Tech Chem Pharm
Performance |
| Timeline |
| Great Taipei Gas |
| SYN Tech Chem |
Great Taipei and SYN Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Great Taipei and SYN Tech
The main advantage of trading using opposite Great Taipei and SYN Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great Taipei position performs unexpectedly, SYN Tech 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 SYN Tech will offset losses from the drop in SYN Tech'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 Hai Gas |
| SYN Tech vs. Yuanta Financial Holdings | SYN Tech vs. Central Reinsurance Corp | SYN Tech vs. PChome Online | SYN Tech vs. Shinkong Insurance Co |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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