Correlation Between Taiwan Weighted and Lelon Electronics
Can any of the company-specific risk be diversified away by investing in both Taiwan Weighted and Lelon 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 Lelon 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 Lelon Electronics Corp, you can compare the effects of market volatilities on Taiwan Weighted and Lelon 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 Lelon Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taiwan Weighted and Lelon Electronics.
Diversification Opportunities for Taiwan Weighted and Lelon Electronics
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Taiwan and Lelon is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Taiwan Weighted and Lelon Electronics Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lelon Electronics Corp 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 Lelon Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lelon Electronics Corp has no effect on the direction of Taiwan Weighted i.e., Taiwan Weighted and Lelon Electronics go up and down completely randomly.
Pair Corralation between Taiwan Weighted and Lelon Electronics
Assuming the 90 days trading horizon Taiwan Weighted is expected to generate 0.26 times more return on investment than Lelon Electronics. However, Taiwan Weighted is 3.86 times less risky than Lelon Electronics. It trades about 0.18 of its potential returns per unit of risk. Lelon Electronics Corp 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 Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Taiwan Weighted vs. Lelon Electronics Corp
Performance |
| Timeline |
Taiwan Weighted and Lelon Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Taiwan Weighted
Pair trading matchups for Taiwan Weighted
Lelon Electronics Corp
Pair trading matchups for Lelon Electronics
Pair Trading with Taiwan Weighted and Lelon Electronics
The main advantage of trading using opposite Taiwan Weighted and Lelon Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taiwan Weighted position performs unexpectedly, Lelon 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 Lelon Electronics will offset losses from the drop in Lelon Electronics' 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 |
| Lelon Electronics vs. TA I Technology Co | Lelon Electronics vs. Walsin Technology Corp | Lelon Electronics vs. Greatek Electronics | Lelon Electronics vs. Pan Jit International |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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