Correlation Between Taiwan Weighted and Les Enphants
Can any of the company-specific risk be diversified away by investing in both Taiwan Weighted and Les Enphants 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 Les Enphants into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Taiwan Weighted and Les Enphants Co, you can compare the effects of market volatilities on Taiwan Weighted and Les Enphants 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 Les Enphants. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taiwan Weighted and Les Enphants.
Diversification Opportunities for Taiwan Weighted and Les Enphants
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Taiwan and Les is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Taiwan Weighted and Les Enphants Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Les Enphants 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 Les Enphants. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Les Enphants has no effect on the direction of Taiwan Weighted i.e., Taiwan Weighted and Les Enphants go up and down completely randomly.
Pair Corralation between Taiwan Weighted and Les Enphants
Assuming the 90 days trading horizon Taiwan Weighted is expected to generate 3.21 times less return on investment than Les Enphants. But when comparing it to its historical volatility, Taiwan Weighted is 2.49 times less risky than Les Enphants. It trades about 0.05 of its potential returns per unit of risk. Les Enphants Co is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 684.00 in Les Enphants Co on September 3, 2024 and sell it today you would earn a total of 182.00 from holding Les Enphants Co or generate 26.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 96.62% |
| Values | Daily Returns |
Taiwan Weighted vs. Les Enphants Co
Performance |
| Timeline |
Taiwan Weighted and Les Enphants Volatility Contrast
Predicted Return Density |
| Returns |
Taiwan Weighted
Pair trading matchups for Taiwan Weighted
Les Enphants Co
Pair trading matchups for Les Enphants
Pair Trading with Taiwan Weighted and Les Enphants
The main advantage of trading using opposite Taiwan Weighted and Les Enphants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taiwan Weighted position performs unexpectedly, Les Enphants 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 Les Enphants will offset losses from the drop in Les Enphants' long position.| Taiwan Weighted vs. Min Aik Technology | Taiwan Weighted vs. CHINA DEVELOPMENT FINANCIAL | Taiwan Weighted vs. Mega Financial Holding | Taiwan Weighted vs. Taishin Financial Holding |
| Les Enphants vs. Far Eastern Department | Les Enphants vs. Shin Shin Co | Les Enphants vs. First Hotel Co | Les Enphants vs. Hung Sheng Construction |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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