Correlation Between Taiwan Weighted and Kee Tai
Can any of the company-specific risk be diversified away by investing in both Taiwan Weighted and Kee Tai 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 Kee Tai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Taiwan Weighted and Kee Tai Properties, you can compare the effects of market volatilities on Taiwan Weighted and Kee Tai 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 Kee Tai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taiwan Weighted and Kee Tai.
Diversification Opportunities for Taiwan Weighted and Kee Tai
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Taiwan and Kee is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Taiwan Weighted and Kee Tai Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kee Tai Properties 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 Kee Tai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kee Tai Properties has no effect on the direction of Taiwan Weighted i.e., Taiwan Weighted and Kee Tai go up and down completely randomly.
Pair Corralation between Taiwan Weighted and Kee Tai
Assuming the 90 days trading horizon Taiwan Weighted is expected to generate 0.73 times more return on investment than Kee Tai. However, Taiwan Weighted is 1.37 times less risky than Kee Tai. It trades about 0.06 of its potential returns per unit of risk. Kee Tai Properties is currently generating about -0.06 per unit of risk. If you would invest 2,243,178 in Taiwan Weighted on August 25, 2024 and sell it today you would earn a total of 47,254 from holding Taiwan Weighted or generate 2.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 93.18% |
| Values | Daily Returns |
Taiwan Weighted vs. Kee Tai Properties
Performance |
| Timeline |
Taiwan Weighted and Kee Tai Volatility Contrast
Predicted Return Density |
| Returns |
Taiwan Weighted
Pair trading matchups for Taiwan Weighted
Kee Tai Properties
Pair trading matchups for Kee Tai
Pair Trading with Taiwan Weighted and Kee Tai
The main advantage of trading using opposite Taiwan Weighted and Kee Tai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taiwan Weighted position performs unexpectedly, Kee Tai 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 Kee Tai will offset losses from the drop in Kee Tai's long position.| Taiwan Weighted vs. Ibase Gaming | Taiwan Weighted vs. Ching Feng Home | Taiwan Weighted vs. Jinan Acetate Chemical | Taiwan Weighted vs. Hsinli Chemical Industrial |
| Kee Tai vs. Chainqui Construction Development | Kee Tai vs. Zinwell | Kee Tai vs. Symtek Automation Asia | Kee Tai vs. CTCI 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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