Correlation Between Standard Chemical and Great Taipei
Can any of the company-specific risk be diversified away by investing in both Standard Chemical and Great Taipei 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 Standard Chemical and Great Taipei into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Standard Chemical Pharmaceutical and Great Taipei Gas, you can compare the effects of market volatilities on Standard Chemical and Great Taipei 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 Standard Chemical with a short position of Great Taipei. Check out your portfolio center. Please also check ongoing floating volatility patterns of Standard Chemical and Great Taipei.
Diversification Opportunities for Standard Chemical and Great Taipei
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Standard and Great is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Standard Chemical Pharmaceutic and Great Taipei Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great Taipei Gas and Standard Chemical 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 Standard Chemical Pharmaceutical are associated (or correlated) with Great Taipei. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great Taipei Gas has no effect on the direction of Standard Chemical i.e., Standard Chemical and Great Taipei go up and down completely randomly.
Pair Corralation between Standard Chemical and Great Taipei
Assuming the 90 days trading horizon Standard Chemical Pharmaceutical is expected to generate 4.34 times more return on investment than Great Taipei. However, Standard Chemical is 4.34 times more volatile than Great Taipei Gas. It trades about 0.01 of its potential returns per unit of risk. Great Taipei Gas is currently generating about -0.08 per unit of risk. If you would invest 6,440 in Standard Chemical Pharmaceutical on September 13, 2024 and sell it today you would earn a total of 20.00 from holding Standard Chemical Pharmaceutical or generate 0.31% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Standard Chemical Pharmaceutic vs. Great Taipei Gas
Performance |
Timeline |
Standard Chemical |
Great Taipei Gas |
Standard Chemical and Great Taipei Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Standard Chemical and Great Taipei
The main advantage of trading using opposite Standard Chemical and Great Taipei positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Standard Chemical position performs unexpectedly, Great Taipei 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 Great Taipei will offset losses from the drop in Great Taipei's long position.Standard Chemical vs. Apex Biotechnology Corp | Standard Chemical vs. Ruentex Development Co | Standard Chemical vs. WiseChip Semiconductor | Standard Chemical vs. Novatek Microelectronics Corp |
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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