Correlation Between Taiwan Weighted and Sun Sea
Can any of the company-specific risk be diversified away by investing in both Taiwan Weighted and Sun Sea 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 Sun Sea into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Taiwan Weighted and Sun Sea Construction, you can compare the effects of market volatilities on Taiwan Weighted and Sun Sea 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 Sun Sea. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taiwan Weighted and Sun Sea.
Diversification Opportunities for Taiwan Weighted and Sun Sea
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Taiwan and Sun is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Taiwan Weighted and Sun Sea Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sun Sea Construction 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 Sun Sea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sun Sea Construction has no effect on the direction of Taiwan Weighted i.e., Taiwan Weighted and Sun Sea go up and down completely randomly.
Pair Corralation between Taiwan Weighted and Sun Sea
Assuming the 90 days trading horizon Taiwan Weighted is expected to generate 0.96 times more return on investment than Sun Sea. However, Taiwan Weighted is 1.04 times less risky than Sun Sea. It trades about 0.03 of its potential returns per unit of risk. Sun Sea Construction is currently generating about -0.1 per unit of risk. If you would invest 2,148,488 in Taiwan Weighted on September 3, 2024 and sell it today you would earn a total of 77,762 from holding Taiwan Weighted or generate 3.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 96.03% |
| Values | Daily Returns |
Taiwan Weighted vs. Sun Sea Construction
Performance |
| Timeline |
Taiwan Weighted and Sun Sea Volatility Contrast
Predicted Return Density |
| Returns |
Taiwan Weighted
Pair trading matchups for Taiwan Weighted
Sun Sea Construction
Pair trading matchups for Sun Sea
Pair Trading with Taiwan Weighted and Sun Sea
The main advantage of trading using opposite Taiwan Weighted and Sun Sea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taiwan Weighted position performs unexpectedly, Sun Sea 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 Sun Sea will offset losses from the drop in Sun Sea'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 |
| Sun Sea vs. Ruentex Engineering Construction | Sun Sea vs. Century Wind Power | Sun Sea vs. BES Engineering Co | Sun Sea vs. Da Cin Construction 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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