Correlation Between Great Wall and Taiwan Secom
Can any of the company-specific risk be diversified away by investing in both Great Wall and Taiwan Secom 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 Great Wall and Taiwan Secom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Great Wall Enterprise and Taiwan Secom Co, you can compare the effects of market volatilities on Great Wall and Taiwan Secom 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 Great Wall with a short position of Taiwan Secom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great Wall and Taiwan Secom.
Diversification Opportunities for Great Wall and Taiwan Secom
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Great and Taiwan is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Great Wall Enterprise and Taiwan Secom Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taiwan Secom and Great Wall 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 Great Wall Enterprise are associated (or correlated) with Taiwan Secom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taiwan Secom has no effect on the direction of Great Wall i.e., Great Wall and Taiwan Secom go up and down completely randomly.
Pair Corralation between Great Wall and Taiwan Secom
Assuming the 90 days trading horizon Great Wall Enterprise is expected to generate 0.75 times more return on investment than Taiwan Secom. However, Great Wall Enterprise is 1.33 times less risky than Taiwan Secom. It trades about 0.07 of its potential returns per unit of risk. Taiwan Secom Co is currently generating about -0.05 per unit of risk. If you would invest 5,370 in Great Wall Enterprise on December 2, 2024 and sell it today you would earn a total of 190.00 from holding Great Wall Enterprise or generate 3.54% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Great Wall Enterprise vs. Taiwan Secom Co
Performance |
Timeline |
Great Wall Enterprise |
Taiwan Secom |
Great Wall and Taiwan Secom Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Great Wall and Taiwan Secom
The main advantage of trading using opposite Great Wall and Taiwan Secom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great Wall position performs unexpectedly, Taiwan Secom 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 Taiwan Secom will offset losses from the drop in Taiwan Secom's long position.Great Wall vs. Charoen Pokphand Enterprise | Great Wall vs. Uni President Enterprises Corp | Great Wall vs. Lien Hwa Industrial | Great Wall vs. Standard Foods Corp |
Taiwan Secom vs. Taiwan Shin Kong | Taiwan Secom vs. President Chain Store | Taiwan Secom vs. Yulon Finance Corp | Taiwan Secom vs. Giant Manufacturing 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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