Correlation Between Taiwan Paiho and Taiwan Hon
Can any of the company-specific risk be diversified away by investing in both Taiwan Paiho and Taiwan Hon 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 Paiho and Taiwan Hon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Taiwan Paiho and Taiwan Hon Chuan, you can compare the effects of market volatilities on Taiwan Paiho and Taiwan Hon 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 Paiho with a short position of Taiwan Hon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taiwan Paiho and Taiwan Hon.
Diversification Opportunities for Taiwan Paiho and Taiwan Hon
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Taiwan and Taiwan is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Taiwan Paiho and Taiwan Hon Chuan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taiwan Hon Chuan and Taiwan Paiho 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 Paiho are associated (or correlated) with Taiwan Hon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taiwan Hon Chuan has no effect on the direction of Taiwan Paiho i.e., Taiwan Paiho and Taiwan Hon go up and down completely randomly.
Pair Corralation between Taiwan Paiho and Taiwan Hon
Assuming the 90 days trading horizon Taiwan Paiho is expected to generate 1.37 times more return on investment than Taiwan Hon. However, Taiwan Paiho is 1.37 times more volatile than Taiwan Hon Chuan. It trades about 0.06 of its potential returns per unit of risk. Taiwan Hon Chuan is currently generating about 0.07 per unit of risk. If you would invest 5,265 in Taiwan Paiho on September 1, 2024 and sell it today you would earn a total of 2,515 from holding Taiwan Paiho or generate 47.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
Taiwan Paiho vs. Taiwan Hon Chuan
Performance |
| Timeline |
| Taiwan Paiho |
| Taiwan Hon Chuan |
Taiwan Paiho and Taiwan Hon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taiwan Paiho and Taiwan Hon
The main advantage of trading using opposite Taiwan Paiho and Taiwan Hon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taiwan Paiho position performs unexpectedly, Taiwan Hon 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 Hon will offset losses from the drop in Taiwan Hon's long position.| Taiwan Paiho vs. Chaintech Technology Corp | Taiwan Paiho vs. AVerMedia Technologies | Taiwan Paiho vs. Avision | Taiwan Paiho vs. Clevo Co |
| Taiwan Hon vs. Connection Technology Systems | Taiwan Hon vs. Nova Technology | Taiwan Hon vs. Advanced Wireless Semiconductor | Taiwan Hon vs. STL Technology 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Stocks Directory Find actively traded stocks across global markets | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |