Correlation Between Taiwan Weighted and Nak Sealing
Can any of the company-specific risk be diversified away by investing in both Taiwan Weighted and Nak Sealing 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 Nak Sealing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Taiwan Weighted and Nak Sealing Technologies, you can compare the effects of market volatilities on Taiwan Weighted and Nak Sealing 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 Nak Sealing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taiwan Weighted and Nak Sealing.
Diversification Opportunities for Taiwan Weighted and Nak Sealing
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Taiwan and Nak is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Taiwan Weighted and Nak Sealing Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nak Sealing Technologies 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 Nak Sealing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nak Sealing Technologies has no effect on the direction of Taiwan Weighted i.e., Taiwan Weighted and Nak Sealing go up and down completely randomly.
Pair Corralation between Taiwan Weighted and Nak Sealing
Assuming the 90 days trading horizon Taiwan Weighted is expected to under-perform the Nak Sealing. But the index apears to be less risky and, when comparing its historical volatility, Taiwan Weighted is 1.13 times less risky than Nak Sealing. The index trades about -0.11 of its potential returns per unit of risk. The Nak Sealing Technologies is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 11,650 in Nak Sealing Technologies on August 28, 2024 and sell it today you would earn a total of 50.00 from holding Nak Sealing Technologies or generate 0.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Taiwan Weighted vs. Nak Sealing Technologies
Performance |
| Timeline |
Taiwan Weighted and Nak Sealing Volatility Contrast
Predicted Return Density |
| Returns |
Taiwan Weighted
Pair trading matchups for Taiwan Weighted
Nak Sealing Technologies
Pair trading matchups for Nak Sealing
Pair Trading with Taiwan Weighted and Nak Sealing
The main advantage of trading using opposite Taiwan Weighted and Nak Sealing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taiwan Weighted position performs unexpectedly, Nak Sealing 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 Nak Sealing will offset losses from the drop in Nak Sealing'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 |
| Nak Sealing vs. Sunny Friend Environmental | Nak Sealing vs. TTET Union Corp | Nak Sealing vs. ECOVE Environment Corp | Nak Sealing vs. Yulon Finance 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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