Correlation Between Great Taipei and Symtek Automation
Can any of the company-specific risk be diversified away by investing in both Great Taipei and Symtek Automation 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 Symtek Automation 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 Symtek Automation Asia, you can compare the effects of market volatilities on Great Taipei and Symtek Automation 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 Symtek Automation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great Taipei and Symtek Automation.
Diversification Opportunities for Great Taipei and Symtek Automation
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Great and Symtek is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Great Taipei Gas and Symtek Automation Asia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Symtek Automation Asia 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 Symtek Automation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Symtek Automation Asia has no effect on the direction of Great Taipei i.e., Great Taipei and Symtek Automation go up and down completely randomly.
Pair Corralation between Great Taipei and Symtek Automation
Assuming the 90 days trading horizon Great Taipei is expected to generate 6.6 times less return on investment than Symtek Automation. But when comparing it to its historical volatility, Great Taipei Gas is 15.81 times less risky than Symtek Automation. It trades about 0.22 of its potential returns per unit of risk. Symtek Automation Asia is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 20,450 in Symtek Automation Asia on August 30, 2024 and sell it today you would earn a total of 1,300 from holding Symtek Automation Asia or generate 6.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Great Taipei Gas vs. Symtek Automation Asia
Performance |
| Timeline |
| Great Taipei Gas |
| Symtek Automation Asia |
Great Taipei and Symtek Automation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Great Taipei and Symtek Automation
The main advantage of trading using opposite Great Taipei and Symtek Automation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great Taipei position performs unexpectedly, Symtek Automation 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 Symtek Automation will offset losses from the drop in Symtek Automation'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 |
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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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