Correlation Between Taiwan Fu and Poya International
Can any of the company-specific risk be diversified away by investing in both Taiwan Fu and Poya International 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 Poya International 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 Poya International Co, you can compare the effects of market volatilities on Taiwan Fu and Poya International 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 Poya International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taiwan Fu and Poya International.
Diversification Opportunities for Taiwan Fu and Poya International
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Taiwan and Poya is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Taiwan Fu Hsing and Poya International Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Poya International 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 Poya International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Poya International has no effect on the direction of Taiwan Fu i.e., Taiwan Fu and Poya International go up and down completely randomly.
Pair Corralation between Taiwan Fu and Poya International
Assuming the 90 days trading horizon Taiwan Fu Hsing is expected to generate 0.82 times more return on investment than Poya International. However, Taiwan Fu Hsing is 1.22 times less risky than Poya International. It trades about 0.09 of its potential returns per unit of risk. Poya International Co is currently generating about -0.21 per unit of risk. If you would invest 5,150 in Taiwan Fu Hsing on October 26, 2024 and sell it today you would earn a total of 60.00 from holding Taiwan Fu Hsing or generate 1.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Taiwan Fu Hsing vs. Poya International Co
Performance |
| Timeline |
| Taiwan Fu Hsing |
| Poya International |
Taiwan Fu and Poya International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taiwan Fu and Poya International
The main advantage of trading using opposite Taiwan Fu and Poya International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taiwan Fu position performs unexpectedly, Poya International 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 Poya International will offset losses from the drop in Poya International'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 |
| Poya International vs. Tong Yang Industry | Poya International vs. Ta Yih Industrial | Poya International vs. Basso Industry Corp | Poya International vs. China Motor 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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