Correlation Between Taiwan Weighted and Fulgent Sun
Can any of the company-specific risk be diversified away by investing in both Taiwan Weighted and Fulgent Sun 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 Fulgent Sun into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Taiwan Weighted and Fulgent Sun International, you can compare the effects of market volatilities on Taiwan Weighted and Fulgent Sun 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 Fulgent Sun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taiwan Weighted and Fulgent Sun.
Diversification Opportunities for Taiwan Weighted and Fulgent Sun
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Taiwan and Fulgent is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Taiwan Weighted and Fulgent Sun International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fulgent Sun International 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 Fulgent Sun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fulgent Sun International has no effect on the direction of Taiwan Weighted i.e., Taiwan Weighted and Fulgent Sun go up and down completely randomly.
Pair Corralation between Taiwan Weighted and Fulgent Sun
Assuming the 90 days trading horizon Taiwan Weighted is expected to generate 0.54 times more return on investment than Fulgent Sun. However, Taiwan Weighted is 1.85 times less risky than Fulgent Sun. It trades about 0.09 of its potential returns per unit of risk. Fulgent Sun International is currently generating about -0.02 per unit of risk. If you would invest 1,498,074 in Taiwan Weighted on August 26, 2024 and sell it today you would earn a total of 792,358 from holding Taiwan Weighted or generate 52.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.75% |
| Values | Daily Returns |
Taiwan Weighted vs. Fulgent Sun International
Performance |
| Timeline |
Taiwan Weighted and Fulgent Sun Volatility Contrast
Predicted Return Density |
| Returns |
Taiwan Weighted
Pair trading matchups for Taiwan Weighted
Fulgent Sun International
Pair trading matchups for Fulgent Sun
Pair Trading with Taiwan Weighted and Fulgent Sun
The main advantage of trading using opposite Taiwan Weighted and Fulgent Sun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taiwan Weighted position performs unexpectedly, Fulgent Sun 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 Fulgent Sun will offset losses from the drop in Fulgent Sun's long position.| Taiwan Weighted vs. Wei Chuan Foods | Taiwan Weighted vs. Jetwell Computer Co | Taiwan Weighted vs. Syscom Computer Engineering | Taiwan Weighted vs. Unitech Computer Co |
| Fulgent Sun vs. Feng Tay Enterprises | Fulgent Sun vs. Pou Chen Corp | Fulgent Sun vs. Taiwan Paiho | Fulgent Sun vs. Merida Industry 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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