Correlation Between Taiwan Secom and Thunder Tiger
Can any of the company-specific risk be diversified away by investing in both Taiwan Secom and Thunder Tiger 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 Taiwan Secom and Thunder Tiger into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Taiwan Secom Co and Thunder Tiger Corp, you can compare the effects of market volatilities on Taiwan Secom and Thunder Tiger 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 Taiwan Secom with a short position of Thunder Tiger. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taiwan Secom and Thunder Tiger.
Diversification Opportunities for Taiwan Secom and Thunder Tiger
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Taiwan and Thunder is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Taiwan Secom Co and Thunder Tiger Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thunder Tiger Corp and Taiwan Secom 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 Taiwan Secom Co are associated (or correlated) with Thunder Tiger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thunder Tiger Corp has no effect on the direction of Taiwan Secom i.e., Taiwan Secom and Thunder Tiger go up and down completely randomly.
Pair Corralation between Taiwan Secom and Thunder Tiger
Assuming the 90 days trading horizon Taiwan Secom Co is expected to generate 0.68 times more return on investment than Thunder Tiger. However, Taiwan Secom Co is 1.47 times less risky than Thunder Tiger. It trades about 0.03 of its potential returns per unit of risk. Thunder Tiger Corp is currently generating about -0.07 per unit of risk. If you would invest 12,400 in Taiwan Secom Co on September 1, 2024 and sell it today you would earn a total of 450.00 from holding Taiwan Secom Co or generate 3.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.22% |
| Values | Daily Returns |
Taiwan Secom Co vs. Thunder Tiger Corp
Performance |
| Timeline |
| Taiwan Secom |
| Thunder Tiger Corp |
Taiwan Secom and Thunder Tiger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taiwan Secom and Thunder Tiger
The main advantage of trading using opposite Taiwan Secom and Thunder Tiger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taiwan Secom position performs unexpectedly, Thunder Tiger 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 Thunder Tiger will offset losses from the drop in Thunder Tiger's long position.| Taiwan Secom vs. Taiwan Shin Kong | Taiwan Secom vs. President Chain Store | Taiwan Secom vs. Yulon Finance Corp | Taiwan Secom vs. Giant Manufacturing Co |
| Thunder Tiger vs. Chaintech Technology Corp | Thunder Tiger vs. AVerMedia Technologies | Thunder Tiger vs. Avision | Thunder Tiger vs. Clevo 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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