Correlation Between Great Taipei and Information Technology
Can any of the company-specific risk be diversified away by investing in both Great Taipei and Information Technology 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 Information Technology 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 Information Technology Total, you can compare the effects of market volatilities on Great Taipei and Information Technology 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 Information Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great Taipei and Information Technology.
Diversification Opportunities for Great Taipei and Information Technology
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Great and Information is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Great Taipei Gas and Information Technology Total in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Information Technology 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 Information Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Information Technology has no effect on the direction of Great Taipei i.e., Great Taipei and Information Technology go up and down completely randomly.
Pair Corralation between Great Taipei and Information Technology
Assuming the 90 days trading horizon Great Taipei Gas is expected to generate 0.12 times more return on investment than Information Technology. However, Great Taipei Gas is 8.44 times less risky than Information Technology. It trades about 0.22 of its potential returns per unit of risk. Information Technology Total is currently generating about -0.26 per unit of risk. If you would invest 3,005 in Great Taipei Gas on August 30, 2024 and sell it today you would earn a total of 35.00 from holding Great Taipei Gas or generate 1.16% 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. Information Technology Total
Performance |
| Timeline |
| Great Taipei Gas |
| Information Technology |
Great Taipei and Information Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Great Taipei and Information Technology
The main advantage of trading using opposite Great Taipei and Information Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great Taipei position performs unexpectedly, Information Technology 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 Information Technology will offset losses from the drop in Information Technology'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 |
| Information Technology vs. Wistron Corp | Information Technology vs. Wistron NeWeb Corp | Information Technology vs. Pegatron Corp | Information Technology vs. Dimerco Data System |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |