Correlation Between Taiwan Weighted and X Legend
Can any of the company-specific risk be diversified away by investing in both Taiwan Weighted and X Legend 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 X Legend into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Taiwan Weighted and X Legend Entertainment Co, you can compare the effects of market volatilities on Taiwan Weighted and X Legend 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 X Legend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taiwan Weighted and X Legend.
Diversification Opportunities for Taiwan Weighted and X Legend
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Taiwan and 4994 is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Taiwan Weighted and X Legend Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on X Legend Entertainment 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 X Legend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of X Legend Entertainment has no effect on the direction of Taiwan Weighted i.e., Taiwan Weighted and X Legend go up and down completely randomly.
Pair Corralation between Taiwan Weighted and X Legend
Assuming the 90 days trading horizon Taiwan Weighted is expected to under-perform the X Legend. In addition to that, Taiwan Weighted is 1.07 times more volatile than X Legend Entertainment Co. It trades about -0.06 of its total potential returns per unit of risk. X Legend Entertainment Co is currently generating about 0.31 per unit of volatility. If you would invest 10,100 in X Legend Entertainment Co on August 25, 2024 and sell it today you would earn a total of 600.00 from holding X Legend Entertainment Co or generate 5.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Taiwan Weighted vs. X Legend Entertainment Co
Performance |
| Timeline |
Taiwan Weighted and X Legend Volatility Contrast
Predicted Return Density |
| Returns |
Taiwan Weighted
Pair trading matchups for Taiwan Weighted
X Legend Entertainment Co
Pair trading matchups for X Legend
Pair Trading with Taiwan Weighted and X Legend
The main advantage of trading using opposite Taiwan Weighted and X Legend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taiwan Weighted position performs unexpectedly, X Legend 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 X Legend will offset losses from the drop in X Legend's long position.| Taiwan Weighted vs. First Hotel Co | Taiwan Weighted vs. Great China Metal | Taiwan Weighted vs. HOYA Resort Hotel | Taiwan Weighted vs. Kindom Construction Corp |
| X Legend vs. Chunghwa Telecom Co | X Legend vs. Far EasTone Telecommunications | X Legend vs. CTBC Financial Holding | X Legend vs. Fubon Financial Holding |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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