Correlation Between Taiwan Weighted and Macronix International
Can any of the company-specific risk be diversified away by investing in both Taiwan Weighted and Macronix International 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 Macronix International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Taiwan Weighted and Macronix International Co, you can compare the effects of market volatilities on Taiwan Weighted and Macronix International 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 Macronix International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taiwan Weighted and Macronix International.
Diversification Opportunities for Taiwan Weighted and Macronix International
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Taiwan and Macronix is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Taiwan Weighted and Macronix International Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macronix International 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 Macronix International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macronix International has no effect on the direction of Taiwan Weighted i.e., Taiwan Weighted and Macronix International go up and down completely randomly.
Pair Corralation between Taiwan Weighted and Macronix International
Assuming the 90 days trading horizon Taiwan Weighted is expected to generate 0.65 times more return on investment than Macronix International. However, Taiwan Weighted is 1.53 times less risky than Macronix International. It trades about 0.09 of its potential returns per unit of risk. Macronix International Co is currently generating about -0.06 per unit of risk. If you would invest 1,581,077 in Taiwan Weighted on August 25, 2024 and sell it today you would earn a total of 709,355 from holding Taiwan Weighted or generate 44.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.52% |
| Values | Daily Returns |
Taiwan Weighted vs. Macronix International Co
Performance |
| Timeline |
Taiwan Weighted and Macronix International Volatility Contrast
Predicted Return Density |
| Returns |
Taiwan Weighted
Pair trading matchups for Taiwan Weighted
Macronix International Co
Pair trading matchups for Macronix International
Pair Trading with Taiwan Weighted and Macronix International
The main advantage of trading using opposite Taiwan Weighted and Macronix International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taiwan Weighted position performs unexpectedly, Macronix International 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 Macronix International will offset losses from the drop in Macronix International's long position.| Taiwan Weighted vs. First Hotel Co | Taiwan Weighted vs. Great China Metal | Taiwan Weighted vs. HOYA Resort Hotel | Taiwan Weighted vs. Kindom Construction Corp |
| Macronix International vs. Novatek Microelectronics Corp | Macronix International vs. MediaTek | Macronix International vs. Quanta Computer | Macronix International vs. United Microelectronics |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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