Correlation Between Taiwan Weighted and XAC Automation
Can any of the company-specific risk be diversified away by investing in both Taiwan Weighted and XAC Automation 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 XAC Automation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Taiwan Weighted and XAC Automation, you can compare the effects of market volatilities on Taiwan Weighted and XAC Automation 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 XAC Automation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taiwan Weighted and XAC Automation.
Diversification Opportunities for Taiwan Weighted and XAC Automation
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Taiwan and XAC is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Taiwan Weighted and XAC Automation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XAC Automation 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 XAC Automation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XAC Automation has no effect on the direction of Taiwan Weighted i.e., Taiwan Weighted and XAC Automation go up and down completely randomly.
Pair Corralation between Taiwan Weighted and XAC Automation
Assuming the 90 days trading horizon Taiwan Weighted is expected to generate 0.53 times more return on investment than XAC Automation. However, Taiwan Weighted is 1.88 times less risky than XAC Automation. It trades about 0.09 of its potential returns per unit of risk. XAC Automation is currently generating about 0.02 per unit of risk. If you would invest 1,757,266 in Taiwan Weighted on September 3, 2024 and sell it today you would earn a total of 468,984 from holding Taiwan Weighted or generate 26.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.75% |
| Values | Daily Returns |
Taiwan Weighted vs. XAC Automation
Performance |
| Timeline |
Taiwan Weighted and XAC Automation Volatility Contrast
Predicted Return Density |
| Returns |
Taiwan Weighted
Pair trading matchups for Taiwan Weighted
XAC Automation
Pair trading matchups for XAC Automation
Pair Trading with Taiwan Weighted and XAC Automation
The main advantage of trading using opposite Taiwan Weighted and XAC Automation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taiwan Weighted position performs unexpectedly, XAC Automation 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 XAC Automation will offset losses from the drop in XAC Automation's 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 |
| XAC Automation vs. Chinese Maritime Transport | XAC Automation vs. Lian Hwa Foods | XAC Automation vs. Emerging Display Technologies | XAC Automation vs. Mercuries Life Insurance |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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