Correlation Between Taiwan Weighted and Ko Ja
Can any of the company-specific risk be diversified away by investing in both Taiwan Weighted and Ko Ja 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 Ko Ja into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Taiwan Weighted and Ko Ja Cayman, you can compare the effects of market volatilities on Taiwan Weighted and Ko Ja 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 Ko Ja. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taiwan Weighted and Ko Ja.
Diversification Opportunities for Taiwan Weighted and Ko Ja
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Taiwan and 5215 is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Taiwan Weighted and Ko Ja Cayman in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ko Ja Cayman 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 Ko Ja. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ko Ja Cayman has no effect on the direction of Taiwan Weighted i.e., Taiwan Weighted and Ko Ja go up and down completely randomly.
Pair Corralation between Taiwan Weighted and Ko Ja
Assuming the 90 days trading horizon Taiwan Weighted is expected to generate 0.75 times more return on investment than Ko Ja. However, Taiwan Weighted is 1.34 times less risky than Ko Ja. It trades about 0.03 of its potential returns per unit of risk. Ko Ja Cayman is currently generating about -0.02 per unit of risk. If you would invest 2,153,676 in Taiwan Weighted on September 1, 2024 and sell it today you would earn a total of 72,574 from holding Taiwan Weighted or generate 3.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.31% |
| Values | Daily Returns |
Taiwan Weighted vs. Ko Ja Cayman
Performance |
| Timeline |
Taiwan Weighted and Ko Ja Volatility Contrast
Predicted Return Density |
| Returns |
Taiwan Weighted
Pair trading matchups for Taiwan Weighted
Ko Ja Cayman
Pair trading matchups for Ko Ja
Pair Trading with Taiwan Weighted and Ko Ja
The main advantage of trading using opposite Taiwan Weighted and Ko Ja positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taiwan Weighted position performs unexpectedly, Ko Ja 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 Ko Ja will offset losses from the drop in Ko Ja's long position.| Taiwan Weighted vs. Asustek Computer | Taiwan Weighted vs. Grand Plastic Technology | Taiwan Weighted vs. Cheng Mei Materials | Taiwan Weighted vs. Ruentex Materials Co |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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