Correlation Between Airtac International and Taiwan Chelic

Can any of the company-specific risk be diversified away by investing in both Airtac International and Taiwan Chelic 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 Airtac International and Taiwan Chelic into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Airtac International Group and Taiwan Chelic Corp, you can compare the effects of market volatilities on Airtac International and Taiwan Chelic 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 Airtac International with a short position of Taiwan Chelic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Airtac International and Taiwan Chelic.

Diversification Opportunities for Airtac International and Taiwan Chelic

0.52

Correlation Coefficient

Airtac International  Taiwan Chelic

Very weak diversification

The 3 months correlation between Airtac and Taiwan is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Airtac International Group and Taiwan Chelic Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taiwan Chelic Corp and Airtac International 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 Airtac International Group are associated (or correlated) with Taiwan Chelic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taiwan Chelic Corp has no effect on the direction of Airtac International i.e., Airtac International and Taiwan Chelic go up and down completely randomly.

Pair Corralation between Airtac International and Taiwan Chelic

Assuming the 90 days trading horizon Airtac International is expected to generate 1.9 times less return on investment than Taiwan Chelic. But when comparing it to its historical volatility, Airtac International Group is 1.51 times less risky than Taiwan Chelic. It trades about 0.13 of its potential returns per unit of risk. Taiwan Chelic Corp is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  3,730  in Taiwan Chelic Corp on October 5, 2024 and sell it today you would earn a total of  460.00  from holding Taiwan Chelic Corp or generate 12.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.45%
Values	Daily Returns

Airtac International Group  vs.  Taiwan Chelic Corp

Airtac International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Airtac International Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Taiwan Chelic Corp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Taiwan Chelic Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Taiwan Chelic is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Airtac International and Taiwan Chelic

The main advantage of trading using opposite Airtac International and Taiwan Chelic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Airtac International position performs unexpectedly, Taiwan Chelic 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 Chelic will offset losses from the drop in Taiwan Chelic's long position.

The idea behind Airtac International Group and Taiwan Chelic Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.