Correlation Between Qisda Corp and Tatung

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

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

Diversification Opportunities for Qisda Corp and Tatung

0.31

Correlation Coefficient

Qisda Corp  Tatung

Weak diversification

The 3 months correlation between Qisda and Tatung is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Qisda Corp and Tatung Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tatung and Qisda Corp 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 Qisda Corp are associated (or correlated) with Tatung. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tatung has no effect on the direction of Qisda Corp i.e., Qisda Corp and Tatung go up and down completely randomly.

Pair Corralation between Qisda Corp and Tatung

Assuming the 90 days trading horizon Qisda Corp is expected to generate 0.51 times more return on investment than Tatung. However, Qisda Corp is 1.96 times less risky than Tatung. It trades about -0.05 of its potential returns per unit of risk. Tatung Co is currently generating about -0.04 per unit of risk. If you would invest  3,710  in Qisda Corp on September 16, 2024 and sell it today you would lose (150.00) from holding Qisda Corp or give up 4.04% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Qisda Corp  vs.  Tatung Co

Qisda Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Qisda Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Qisda Corp is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Tatung

Risk-Adjusted Performance

0 of 100

Very Weak

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

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

The idea behind Qisda Corp and Tatung 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.