Correlation Between Capital Income and Tatung
Can any of the company-specific risk be diversified away by investing in both Capital Income and Tatung 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 Capital Income and Tatung into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capital Income Builder and Tatung Co, you can compare the effects of market volatilities on Capital Income and Tatung 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 Capital Income with a short position of Tatung. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital Income and Tatung.
Diversification Opportunities for Capital Income and Tatung
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Capital and Tatung is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Capital Income Builder and Tatung Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tatung and Capital Income 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 Capital Income Builder are associated (or correlated) with Tatung. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tatung has no effect on the direction of Capital Income i.e., Capital Income and Tatung go up and down completely randomly.
Pair Corralation between Capital Income and Tatung
Assuming the 90 days horizon Capital Income Builder is expected to generate 0.25 times more return on investment than Tatung. However, Capital Income Builder is 3.98 times less risky than Tatung. It trades about 0.04 of its potential returns per unit of risk. Tatung Co is currently generating about -0.05 per unit of risk. If you would invest 6,824 in Capital Income Builder on October 22, 2024 and sell it today you would earn a total of 171.00 from holding Capital Income Builder or generate 2.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.41% |
| Values | Daily Returns |
Capital Income Builder vs. Tatung Co
Performance |
| Timeline |
| Capital Income Builder |
| Tatung |
Capital Income and Tatung Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capital Income and Tatung
The main advantage of trading using opposite Capital Income and Tatung positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital Income position performs unexpectedly, Tatung 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 Tatung will offset losses from the drop in Tatung's long position.| Capital Income vs. Alternative Asset Allocation | Capital Income vs. Tax Managed Mid Small | Capital Income vs. Victory Incore Fund | Capital Income vs. Lord Abbett Diversified |
| Tatung vs. Qisda Corp | Tatung vs. Winbond Electronics Corp | Tatung vs. Compal Electronics | Tatung vs. Inventec Corp |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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