Correlation Between Taiwan Weighted and Tingyi Holding
Can any of the company-specific risk be diversified away by investing in both Taiwan Weighted and Tingyi Holding 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 Tingyi Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Taiwan Weighted and Tingyi Holding Corp, you can compare the effects of market volatilities on Taiwan Weighted and Tingyi Holding 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 Tingyi Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taiwan Weighted and Tingyi Holding.
Diversification Opportunities for Taiwan Weighted and Tingyi Holding
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Taiwan and Tingyi is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Taiwan Weighted and Tingyi Holding Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tingyi Holding Corp 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 Tingyi Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tingyi Holding Corp has no effect on the direction of Taiwan Weighted i.e., Taiwan Weighted and Tingyi Holding go up and down completely randomly.
Pair Corralation between Taiwan Weighted and Tingyi Holding
Assuming the 90 days trading horizon Taiwan Weighted is expected to generate 0.7 times more return on investment than Tingyi Holding. However, Taiwan Weighted is 1.43 times less risky than Tingyi Holding. It trades about -0.11 of its potential returns per unit of risk. Tingyi Holding Corp is currently generating about -0.34 per unit of risk. If you would invest 2,319,807 in Taiwan Weighted on August 28, 2024 and sell it today you would lose (51,931) from holding Taiwan Weighted or give up 2.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Taiwan Weighted vs. Tingyi Holding Corp
Performance |
| Timeline |
Taiwan Weighted and Tingyi Holding Volatility Contrast
Predicted Return Density |
| Returns |
Taiwan Weighted
Pair trading matchups for Taiwan Weighted
Tingyi Holding Corp
Pair trading matchups for Tingyi Holding
Pair Trading with Taiwan Weighted and Tingyi Holding
The main advantage of trading using opposite Taiwan Weighted and Tingyi Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taiwan Weighted position performs unexpectedly, Tingyi Holding 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 Tingyi Holding will offset losses from the drop in Tingyi Holding's long position.| Taiwan Weighted vs. Kworld Computer Co | Taiwan Weighted vs. FDC International Hotels | Taiwan Weighted vs. Wonderful Hi Tech Co | Taiwan Weighted vs. Landis Taipei Hotel |
| Tingyi Holding vs. Uni President Enterprises Corp | Tingyi Holding vs. Lien Hwa Industrial | Tingyi Holding vs. Great Wall Enterprise | Tingyi Holding vs. Standard Foods Corp |
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.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |