Correlation Between Globe Union and Taiwan Sakura
Can any of the company-specific risk be diversified away by investing in both Globe Union and Taiwan Sakura 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 Globe Union and Taiwan Sakura into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Globe Union Industrial and Taiwan Sakura Corp, you can compare the effects of market volatilities on Globe Union and Taiwan Sakura 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 Globe Union with a short position of Taiwan Sakura. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globe Union and Taiwan Sakura.
Diversification Opportunities for Globe Union and Taiwan Sakura
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Globe and Taiwan is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Globe Union Industrial and Taiwan Sakura Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taiwan Sakura Corp and Globe Union 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 Globe Union Industrial are associated (or correlated) with Taiwan Sakura. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taiwan Sakura Corp has no effect on the direction of Globe Union i.e., Globe Union and Taiwan Sakura go up and down completely randomly.
Pair Corralation between Globe Union and Taiwan Sakura
Assuming the 90 days trading horizon Globe Union Industrial is expected to under-perform the Taiwan Sakura. In addition to that, Globe Union is 2.2 times more volatile than Taiwan Sakura Corp. It trades about -0.26 of its total potential returns per unit of risk. Taiwan Sakura Corp is currently generating about 0.03 per unit of volatility. If you would invest 8,460 in Taiwan Sakura Corp on August 29, 2024 and sell it today you would earn a total of 40.00 from holding Taiwan Sakura Corp or generate 0.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Globe Union Industrial vs. Taiwan Sakura Corp
Performance |
| Timeline |
| Globe Union Industrial |
| Taiwan Sakura Corp |
Globe Union and Taiwan Sakura Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Globe Union and Taiwan Sakura
The main advantage of trading using opposite Globe Union and Taiwan Sakura positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globe Union position performs unexpectedly, Taiwan Sakura 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 Sakura will offset losses from the drop in Taiwan Sakura's long position.| Globe Union vs. Sunny Friend Environmental | Globe Union vs. TTET Union Corp | Globe Union vs. ECOVE Environment Corp | Globe Union vs. Yulon Finance Corp |
| Taiwan Sakura vs. Taiwan Semiconductor Manufacturing | Taiwan Sakura vs. Hon Hai Precision | Taiwan Sakura vs. MediaTek | Taiwan Sakura vs. Chunghwa Telecom 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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