Correlation Between Taiwan Weighted and Chia Her
Can any of the company-specific risk be diversified away by investing in both Taiwan Weighted and Chia Her 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 Weighted and Chia Her into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Taiwan Weighted and Chia Her Industrial, you can compare the effects of market volatilities on Taiwan Weighted and Chia Her 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 Weighted with a short position of Chia Her. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taiwan Weighted and Chia Her.
Diversification Opportunities for Taiwan Weighted and Chia Her
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Taiwan and Chia is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Taiwan Weighted and Chia Her Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chia Her Industrial and Taiwan Weighted 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 Weighted are associated (or correlated) with Chia Her. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chia Her Industrial has no effect on the direction of Taiwan Weighted i.e., Taiwan Weighted and Chia Her go up and down completely randomly.
Pair Corralation between Taiwan Weighted and Chia Her
Assuming the 90 days trading horizon Taiwan Weighted is expected to generate 0.56 times more return on investment than Chia Her. However, Taiwan Weighted is 1.8 times less risky than Chia Her. It trades about 0.18 of its potential returns per unit of risk. Chia Her Industrial is currently generating about -0.04 per unit of risk. If you would invest 2,269,471 in Taiwan Weighted on November 28, 2024 and sell it today you would earn a total of 59,101 from holding Taiwan Weighted or generate 2.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
Taiwan Weighted vs. Chia Her Industrial
Performance |
| Timeline |
Taiwan Weighted and Chia Her Volatility Contrast
Predicted Return Density |
| Returns |
Taiwan Weighted
Pair trading matchups for Taiwan Weighted
Chia Her Industrial
Pair trading matchups for Chia Her
Pair Trading with Taiwan Weighted and Chia Her
The main advantage of trading using opposite Taiwan Weighted and Chia Her positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taiwan Weighted position performs unexpectedly, Chia Her 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 Chia Her will offset losses from the drop in Chia Her's long position.| Taiwan Weighted vs. Kao Fong Machinery | Taiwan Weighted vs. Te Chang Construction | Taiwan Weighted vs. Strong H Machinery | Taiwan Weighted vs. Advanced Wireless Semiconductor |
| Chia Her vs. Carnival Industrial Corp | Chia Her vs. I Hwa Industrial Co | Chia Her vs. Hung Chou Fiber | Chia Her vs. Tung Ho Textile |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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