Correlation Between Taiwan Weighted and Axiomtek
Can any of the company-specific risk be diversified away by investing in both Taiwan Weighted and Axiomtek 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 Axiomtek into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Taiwan Weighted and Axiomtek Co, you can compare the effects of market volatilities on Taiwan Weighted and Axiomtek 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 Axiomtek. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taiwan Weighted and Axiomtek.
Diversification Opportunities for Taiwan Weighted and Axiomtek
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Taiwan and Axiomtek is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Taiwan Weighted and Axiomtek Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axiomtek 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 Axiomtek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axiomtek has no effect on the direction of Taiwan Weighted i.e., Taiwan Weighted and Axiomtek go up and down completely randomly.
Pair Corralation between Taiwan Weighted and Axiomtek
Assuming the 90 days trading horizon Taiwan Weighted is expected to under-perform the Axiomtek. But the index apears to be less risky and, when comparing its historical volatility, Taiwan Weighted is 2.84 times less risky than Axiomtek. The index trades about -0.05 of its potential returns per unit of risk. The Axiomtek Co is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 9,930 in Axiomtek Co on August 27, 2024 and sell it today you would earn a total of 1,070 from holding Axiomtek Co or generate 10.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Taiwan Weighted vs. Axiomtek Co
Performance |
| Timeline |
Taiwan Weighted and Axiomtek Volatility Contrast
Predicted Return Density |
| Returns |
Taiwan Weighted
Pair trading matchups for Taiwan Weighted
Axiomtek Co
Pair trading matchups for Axiomtek
Pair Trading with Taiwan Weighted and Axiomtek
The main advantage of trading using opposite Taiwan Weighted and Axiomtek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taiwan Weighted position performs unexpectedly, Axiomtek 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 Axiomtek will offset losses from the drop in Axiomtek's long position.| Taiwan Weighted vs. Taichung Commercial Bank | Taiwan Weighted vs. China Times Publishing | Taiwan Weighted vs. First Insurance Co | Taiwan Weighted vs. Mega Financial Holding |
| Axiomtek vs. Quanta Computer | Axiomtek vs. Wiwynn Corp | Axiomtek vs. Getac Technology Corp | Axiomtek vs. IEI Integration 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 Stocks Directory module to find actively traded stocks across global markets.
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