Correlation Between National Petroleum and Great Taipei
Can any of the company-specific risk be diversified away by investing in both National Petroleum and Great Taipei 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 National Petroleum and Great Taipei into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Petroleum Co and Great Taipei Gas, you can compare the effects of market volatilities on National Petroleum and Great Taipei 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 National Petroleum with a short position of Great Taipei. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Petroleum and Great Taipei.
Diversification Opportunities for National Petroleum and Great Taipei
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between National and Great is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding National Petroleum Co and Great Taipei Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great Taipei Gas and National Petroleum 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 National Petroleum Co are associated (or correlated) with Great Taipei. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great Taipei Gas has no effect on the direction of National Petroleum i.e., National Petroleum and Great Taipei go up and down completely randomly.
Pair Corralation between National Petroleum and Great Taipei
Assuming the 90 days trading horizon National Petroleum Co is expected to under-perform the Great Taipei. In addition to that, National Petroleum is 3.14 times more volatile than Great Taipei Gas. It trades about -0.24 of its total potential returns per unit of risk. Great Taipei Gas is currently generating about -0.06 per unit of volatility. If you would invest 3,030 in Great Taipei Gas on September 12, 2024 and sell it today you would lose (10.00) from holding Great Taipei Gas or give up 0.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Petroleum Co vs. Great Taipei Gas
Performance |
| Timeline |
| National Petroleum |
| Great Taipei Gas |
National Petroleum and Great Taipei Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Petroleum and Great Taipei
The main advantage of trading using opposite National Petroleum and Great Taipei positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Petroleum position performs unexpectedly, Great Taipei 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 Great Taipei will offset losses from the drop in Great Taipei's long position.| National Petroleum vs. Taiwan Shin Kong | National Petroleum vs. Taiwan Secom Co | National Petroleum vs. Great Taipei Gas | National Petroleum vs. CTCI Corp |
| Great Taipei vs. Taiwan Secom Co | Great Taipei vs. Taiwan Shin Kong | Great Taipei vs. Taiwan Cogeneration Corp | Great Taipei vs. Ruentex Development 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |