Correlation Between Taiwan Weighted and Chicony Power
Can any of the company-specific risk be diversified away by investing in both Taiwan Weighted and Chicony Power 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 Chicony Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Taiwan Weighted and Chicony Power Technology, you can compare the effects of market volatilities on Taiwan Weighted and Chicony Power 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 Chicony Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taiwan Weighted and Chicony Power.
Diversification Opportunities for Taiwan Weighted and Chicony Power
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Taiwan and Chicony is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Taiwan Weighted and Chicony Power Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chicony Power Technology 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 Chicony Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chicony Power Technology has no effect on the direction of Taiwan Weighted i.e., Taiwan Weighted and Chicony Power go up and down completely randomly.
Pair Corralation between Taiwan Weighted and Chicony Power
Assuming the 90 days trading horizon Taiwan Weighted is expected to generate 0.59 times more return on investment than Chicony Power. However, Taiwan Weighted is 1.69 times less risky than Chicony Power. It trades about 0.06 of its potential returns per unit of risk. Chicony Power Technology is currently generating about -0.05 per unit of risk. If you would invest 1,938,692 in Taiwan Weighted on September 1, 2024 and sell it today you would earn a total of 287,558 from holding Taiwan Weighted or generate 14.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.34% |
| Values | Daily Returns |
Taiwan Weighted vs. Chicony Power Technology
Performance |
| Timeline |
Taiwan Weighted and Chicony Power Volatility Contrast
Predicted Return Density |
| Returns |
Taiwan Weighted
Pair trading matchups for Taiwan Weighted
Chicony Power Technology
Pair trading matchups for Chicony Power
Pair Trading with Taiwan Weighted and Chicony Power
The main advantage of trading using opposite Taiwan Weighted and Chicony Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taiwan Weighted position performs unexpectedly, Chicony Power 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 Chicony Power will offset losses from the drop in Chicony Power'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 |
| Chicony Power vs. Ability Enterprise Co | Chicony Power vs. XAC Automation | Chicony Power vs. Cheng Fwa Industrial | Chicony Power vs. Kaulin Mfg |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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