Correlation Between China Television and Taiwan FamilyMart
Can any of the company-specific risk be diversified away by investing in both China Television and Taiwan FamilyMart 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 China Television and Taiwan FamilyMart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Television Co and Taiwan FamilyMart Co, you can compare the effects of market volatilities on China Television and Taiwan FamilyMart 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 China Television with a short position of Taiwan FamilyMart. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Television and Taiwan FamilyMart.
Diversification Opportunities for China Television and Taiwan FamilyMart
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between China and Taiwan is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding China Television Co and Taiwan FamilyMart Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taiwan FamilyMart and China Television 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 China Television Co are associated (or correlated) with Taiwan FamilyMart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taiwan FamilyMart has no effect on the direction of China Television i.e., China Television and Taiwan FamilyMart go up and down completely randomly.
Pair Corralation between China Television and Taiwan FamilyMart
Assuming the 90 days trading horizon China Television Co is expected to generate 4.36 times more return on investment than Taiwan FamilyMart. However, China Television is 4.36 times more volatile than Taiwan FamilyMart Co. It trades about 0.16 of its potential returns per unit of risk. Taiwan FamilyMart Co is currently generating about 0.41 per unit of risk. If you would invest 1,590 in China Television Co on November 27, 2024 and sell it today you would earn a total of 55.00 from holding China Television Co or generate 3.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Television Co vs. Taiwan FamilyMart Co
Performance |
| Timeline |
| China Television |
| Taiwan FamilyMart |
China Television and Taiwan FamilyMart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Television and Taiwan FamilyMart
The main advantage of trading using opposite China Television and Taiwan FamilyMart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Television position performs unexpectedly, Taiwan FamilyMart 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 Taiwan FamilyMart will offset losses from the drop in Taiwan FamilyMart's long position.| China Television vs. Choice Development | China Television vs. Ton Yi Industrial | China Television vs. Taiwan Sakura Corp | China Television vs. Thye Ming Industrial |
| Taiwan FamilyMart vs. President Chain Store | Taiwan FamilyMart vs. Uni President Enterprises Corp | Taiwan FamilyMart vs. Poya International Co | Taiwan FamilyMart vs. Hotai Motor 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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