Correlation Between Taiwan Fu and Generalplus Technology
Can any of the company-specific risk be diversified away by investing in both Taiwan Fu and Generalplus 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 Taiwan Fu and Generalplus Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Taiwan Fu Hsing and Generalplus Technology, you can compare the effects of market volatilities on Taiwan Fu and Generalplus 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 Taiwan Fu with a short position of Generalplus Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taiwan Fu and Generalplus Technology.
Diversification Opportunities for Taiwan Fu and Generalplus Technology
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Taiwan and Generalplus is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Taiwan Fu Hsing and Generalplus Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Generalplus Technology and Taiwan Fu 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 Fu Hsing are associated (or correlated) with Generalplus Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Generalplus Technology has no effect on the direction of Taiwan Fu i.e., Taiwan Fu and Generalplus Technology go up and down completely randomly.
Pair Corralation between Taiwan Fu and Generalplus Technology
Assuming the 90 days trading horizon Taiwan Fu Hsing is expected to generate 0.7 times more return on investment than Generalplus Technology. However, Taiwan Fu Hsing is 1.42 times less risky than Generalplus Technology. It trades about 0.04 of its potential returns per unit of risk. Generalplus Technology is currently generating about 0.02 per unit of risk. If you would invest 4,160 in Taiwan Fu Hsing on September 1, 2024 and sell it today you would earn a total of 1,180 from holding Taiwan Fu Hsing or generate 28.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Taiwan Fu Hsing vs. Generalplus Technology
Performance |
| Timeline |
| Taiwan Fu Hsing |
| Generalplus Technology |
Taiwan Fu and Generalplus Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taiwan Fu and Generalplus Technology
The main advantage of trading using opposite Taiwan Fu and Generalplus Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taiwan Fu position performs unexpectedly, Generalplus 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 Generalplus Technology will offset losses from the drop in Generalplus Technology's long position.| Taiwan Fu vs. Taiwan Shin Kong | Taiwan Fu vs. Taiwan Secom Co | Taiwan Fu vs. Pou Chen Corp | Taiwan Fu vs. Taiwan Hon Chuan |
| Generalplus Technology vs. United Microelectronics | Generalplus Technology vs. Winbond Electronics Corp |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |