Correlation Between Super Dragon and Tainan Spinning
Can any of the company-specific risk be diversified away by investing in both Super Dragon and Tainan Spinning 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 Super Dragon and Tainan Spinning into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Super Dragon Technology and Tainan Spinning Co, you can compare the effects of market volatilities on Super Dragon and Tainan Spinning 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 Super Dragon with a short position of Tainan Spinning. Check out your portfolio center. Please also check ongoing floating volatility patterns of Super Dragon and Tainan Spinning.
Diversification Opportunities for Super Dragon and Tainan Spinning
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Super and Tainan is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Super Dragon Technology and Tainan Spinning Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tainan Spinning and Super Dragon 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 Super Dragon Technology are associated (or correlated) with Tainan Spinning. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tainan Spinning has no effect on the direction of Super Dragon i.e., Super Dragon and Tainan Spinning go up and down completely randomly.
Pair Corralation between Super Dragon and Tainan Spinning
Assuming the 90 days trading horizon Super Dragon Technology is expected to generate 1.72 times more return on investment than Tainan Spinning. However, Super Dragon is 1.72 times more volatile than Tainan Spinning Co. It trades about 0.05 of its potential returns per unit of risk. Tainan Spinning Co is currently generating about 0.02 per unit of risk. If you would invest 2,205 in Super Dragon Technology on September 12, 2024 and sell it today you would earn a total of 795.00 from holding Super Dragon Technology or generate 36.05% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Super Dragon Technology vs. Tainan Spinning Co
Performance |
Timeline |
Super Dragon Technology |
Tainan Spinning |
Super Dragon and Tainan Spinning Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Super Dragon and Tainan Spinning
The main advantage of trading using opposite Super Dragon and Tainan Spinning positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Super Dragon position performs unexpectedly, Tainan Spinning 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 Tainan Spinning will offset losses from the drop in Tainan Spinning's long position.Super Dragon vs. Tainan Spinning Co | Super Dragon vs. Lealea Enterprise Co | Super Dragon vs. China Petrochemical Development | Super Dragon vs. Ruentex Development Co |
Tainan Spinning vs. Lealea Enterprise Co | Tainan Spinning vs. China Petrochemical Development | Tainan Spinning vs. Li Peng Enterprise | Tainan Spinning vs. Oriental Union Chemical |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
Equity Valuation Check real value of public entities based on technical and fundamental data | |
Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |