Correlation Between Taiwan Weighted and Alexander Marine
Can any of the company-specific risk be diversified away by investing in both Taiwan Weighted and Alexander Marine 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 Alexander Marine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Taiwan Weighted and Alexander Marine Co, you can compare the effects of market volatilities on Taiwan Weighted and Alexander Marine 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 Alexander Marine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taiwan Weighted and Alexander Marine.
Diversification Opportunities for Taiwan Weighted and Alexander Marine
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Taiwan and Alexander is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Taiwan Weighted and Alexander Marine Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alexander Marine 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 Alexander Marine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alexander Marine has no effect on the direction of Taiwan Weighted i.e., Taiwan Weighted and Alexander Marine go up and down completely randomly.
Pair Corralation between Taiwan Weighted and Alexander Marine
Assuming the 90 days trading horizon Taiwan Weighted is expected to generate 0.49 times more return on investment than Alexander Marine. However, Taiwan Weighted is 2.03 times less risky than Alexander Marine. It trades about 0.08 of its potential returns per unit of risk. Alexander Marine Co is currently generating about -0.09 per unit of risk. If you would invest 1,699,600 in Taiwan Weighted on August 29, 2024 and sell it today you would earn a total of 533,878 from holding Taiwan Weighted or generate 31.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.46% |
| Values | Daily Returns |
Taiwan Weighted vs. Alexander Marine Co
Performance |
| Timeline |
Taiwan Weighted and Alexander Marine Volatility Contrast
Predicted Return Density |
| Returns |
Taiwan Weighted
Pair trading matchups for Taiwan Weighted
Alexander Marine Co
Pair trading matchups for Alexander Marine
Pair Trading with Taiwan Weighted and Alexander Marine
The main advantage of trading using opposite Taiwan Weighted and Alexander Marine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taiwan Weighted position performs unexpectedly, Alexander Marine 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 Alexander Marine will offset losses from the drop in Alexander Marine's long position.| Taiwan Weighted vs. V Tac Technology Co | Taiwan Weighted vs. Sesoda Corp | Taiwan Weighted vs. Asmedia Technology | Taiwan Weighted vs. Oceanic Beverages Co |
| Alexander Marine vs. Chung Hsin Electric Machinery | Alexander Marine vs. Andes Technology Corp | Alexander Marine vs. Asia Vital Components | Alexander Marine vs. Fulgent Sun International |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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