Correlation Between Taiwan Weighted and Greatek Electronics
Can any of the company-specific risk be diversified away by investing in both Taiwan Weighted and Greatek Electronics 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 Greatek Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Taiwan Weighted and Greatek Electronics, you can compare the effects of market volatilities on Taiwan Weighted and Greatek Electronics 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 Greatek Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taiwan Weighted and Greatek Electronics.
Diversification Opportunities for Taiwan Weighted and Greatek Electronics
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Taiwan and Greatek is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Taiwan Weighted and Greatek Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greatek Electronics 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 Greatek Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greatek Electronics has no effect on the direction of Taiwan Weighted i.e., Taiwan Weighted and Greatek Electronics go up and down completely randomly.
Pair Corralation between Taiwan Weighted and Greatek Electronics
Assuming the 90 days trading horizon Taiwan Weighted is expected to generate 2.78 times less return on investment than Greatek Electronics. In addition to that, Taiwan Weighted is 1.53 times more volatile than Greatek Electronics. It trades about 0.06 of its total potential returns per unit of risk. Greatek Electronics is currently generating about 0.25 per unit of volatility. If you would invest 5,960 in Greatek Electronics on October 26, 2024 and sell it today you would earn a total of 240.00 from holding Greatek Electronics or generate 4.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Taiwan Weighted vs. Greatek Electronics
Performance |
| Timeline |
Taiwan Weighted and Greatek Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Taiwan Weighted
Pair trading matchups for Taiwan Weighted
Greatek Electronics
Pair trading matchups for Greatek Electronics
Pair Trading with Taiwan Weighted and Greatek Electronics
The main advantage of trading using opposite Taiwan Weighted and Greatek Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taiwan Weighted position performs unexpectedly, Greatek Electronics 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 Greatek Electronics will offset losses from the drop in Greatek Electronics' long position.| Taiwan Weighted vs. Sea Sonic Electronics | Taiwan Weighted vs. Everlight Chemical Industrial | Taiwan Weighted vs. LandMark Optoelectronics | Taiwan Weighted vs. Taiwan Chinsan Electronic |
| Greatek Electronics vs. King Yuan Electronics | Greatek Electronics vs. Powertech Technology | Greatek Electronics vs. Realtek Semiconductor Corp | Greatek Electronics vs. Elan Microelectronics 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |