Correlation Between Quintain Steel and Tainan Spinning

Can any of the company-specific risk be diversified away by investing in both Quintain Steel and Tainan Spinning 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 Quintain Steel and Tainan Spinning into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Quintain Steel Co and Tainan Spinning Co, you can compare the effects of market volatilities on Quintain Steel and Tainan Spinning 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 Quintain Steel with a short position of Tainan Spinning. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quintain Steel and Tainan Spinning.

Diversification Opportunities for Quintain Steel and Tainan Spinning

0.48

Correlation Coefficient

Quintain Steel  Tainan Spinning

Very weak diversification

The 3 months correlation between Quintain and Tainan is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Quintain Steel Co and Tainan Spinning Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tainan Spinning and Quintain Steel 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 Quintain Steel Co are associated (or correlated) with Tainan Spinning. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tainan Spinning has no effect on the direction of Quintain Steel i.e., Quintain Steel and Tainan Spinning go up and down completely randomly.

Pair Corralation between Quintain Steel and Tainan Spinning

Assuming the 90 days trading horizon Quintain Steel Co is expected to under-perform the Tainan Spinning. In addition to that, Quintain Steel is 1.26 times more volatile than Tainan Spinning Co. It trades about -0.04 of its total potential returns per unit of risk. Tainan Spinning Co is currently generating about -0.01 per unit of volatility. If you would invest  1,685  in Tainan Spinning Co on December 4, 2024 and sell it today you would lose (190.00) from holding Tainan Spinning Co or give up 11.28% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.79%
Values	Daily Returns

Quintain Steel Co  vs.  Tainan Spinning Co

Quintain Steel

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Quintain Steel Co are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Quintain Steel may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Tainan Spinning

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tainan Spinning Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Tainan Spinning 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 Quintain Steel and Tainan Spinning

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

The idea behind Quintain Steel Co and Tainan Spinning Co 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.

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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.