Correlation Between Taiwan Weighted and Pan Jit
Can any of the company-specific risk be diversified away by investing in both Taiwan Weighted and Pan Jit 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 Pan Jit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Taiwan Weighted and Pan Jit International, you can compare the effects of market volatilities on Taiwan Weighted and Pan Jit 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 Pan Jit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taiwan Weighted and Pan Jit.
Diversification Opportunities for Taiwan Weighted and Pan Jit
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Taiwan and Pan is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Taiwan Weighted and Pan Jit International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pan Jit 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 Pan Jit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pan Jit International has no effect on the direction of Taiwan Weighted i.e., Taiwan Weighted and Pan Jit go up and down completely randomly.
Pair Corralation between Taiwan Weighted and Pan Jit
Assuming the 90 days trading horizon Taiwan Weighted is expected to generate 0.43 times more return on investment than Pan Jit. However, Taiwan Weighted is 2.32 times less risky than Pan Jit. It trades about -0.12 of its potential returns per unit of risk. Pan Jit International is currently generating about -0.21 per unit of risk. If you would invest 2,292,659 in Taiwan Weighted on August 30, 2024 and sell it today you would lose (59,181) from holding Taiwan Weighted or give up 2.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Taiwan Weighted vs. Pan Jit International
Performance |
| Timeline |
Taiwan Weighted and Pan Jit Volatility Contrast
Predicted Return Density |
| Returns |
Taiwan Weighted
Pair trading matchups for Taiwan Weighted
Pan Jit International
Pair trading matchups for Pan Jit
Pair Trading with Taiwan Weighted and Pan Jit
The main advantage of trading using opposite Taiwan Weighted and Pan Jit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taiwan Weighted position performs unexpectedly, Pan Jit 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 Pan Jit will offset losses from the drop in Pan Jit's long position.| Taiwan Weighted vs. Energenesis Biomedical Co | Taiwan Weighted vs. Jia Jie Biomedical | Taiwan Weighted vs. Level Biotechnology | Taiwan Weighted vs. Medigen Biotechnology |
| Pan Jit vs. Elan Microelectronics Corp | Pan Jit vs. Walsin Technology Corp | Pan Jit vs. Unimicron Technology Corp | Pan Jit vs. Visual Photonics Epitaxy |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |