Correlation Between Taiwan Weighted and CKM Building
Can any of the company-specific risk be diversified away by investing in both Taiwan Weighted and CKM Building 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 CKM Building into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Taiwan Weighted and CKM Building Material, you can compare the effects of market volatilities on Taiwan Weighted and CKM Building 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 CKM Building. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taiwan Weighted and CKM Building.
Diversification Opportunities for Taiwan Weighted and CKM Building
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Taiwan and CKM is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Taiwan Weighted and CKM Building Material in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CKM Building Material 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 CKM Building. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CKM Building Material has no effect on the direction of Taiwan Weighted i.e., Taiwan Weighted and CKM Building go up and down completely randomly.
Pair Corralation between Taiwan Weighted and CKM Building
Assuming the 90 days trading horizon Taiwan Weighted is expected to generate 2.06 times less return on investment than CKM Building. But when comparing it to its historical volatility, Taiwan Weighted is 2.07 times less risky than CKM Building. It trades about 0.09 of its potential returns per unit of risk. CKM Building Material is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,497 in CKM Building Material on August 30, 2024 and sell it today you would earn a total of 1,863 from holding CKM Building Material or generate 124.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.75% |
| Values | Daily Returns |
Taiwan Weighted vs. CKM Building Material
Performance |
| Timeline |
Taiwan Weighted and CKM Building Volatility Contrast
Predicted Return Density |
| Returns |
Taiwan Weighted
Pair trading matchups for Taiwan Weighted
CKM Building Material
Pair trading matchups for CKM Building
Pair Trading with Taiwan Weighted and CKM Building
The main advantage of trading using opposite Taiwan Weighted and CKM Building positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taiwan Weighted position performs unexpectedly, CKM Building 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 CKM Building will offset losses from the drop in CKM Building'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 |
| CKM Building vs. Sunspring Metal Corp | CKM Building vs. Champion Building Materials | CKM Building vs. Leatec Fine Ceramics | CKM Building vs. Information Technology Total |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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