Correlation Between Taiwan Mobile and StShine Optical
Can any of the company-specific risk be diversified away by investing in both Taiwan Mobile and StShine Optical 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 Taiwan Mobile and StShine Optical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Taiwan Mobile Co and StShine Optical Co, you can compare the effects of market volatilities on Taiwan Mobile and StShine Optical 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 Taiwan Mobile with a short position of StShine Optical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taiwan Mobile and StShine Optical.
Diversification Opportunities for Taiwan Mobile and StShine Optical
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Taiwan and StShine is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Taiwan Mobile Co and StShine Optical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on StShine Optical and Taiwan Mobile 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 Taiwan Mobile Co are associated (or correlated) with StShine Optical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of StShine Optical has no effect on the direction of Taiwan Mobile i.e., Taiwan Mobile and StShine Optical go up and down completely randomly.
Pair Corralation between Taiwan Mobile and StShine Optical
Assuming the 90 days trading horizon Taiwan Mobile Co is expected to generate 0.64 times more return on investment than StShine Optical. However, Taiwan Mobile Co is 1.57 times less risky than StShine Optical. It trades about 0.08 of its potential returns per unit of risk. StShine Optical Co is currently generating about -0.04 per unit of risk. If you would invest 11,350 in Taiwan Mobile Co on December 30, 2024 and sell it today you would earn a total of 400.00 from holding Taiwan Mobile Co or generate 3.52% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Taiwan Mobile Co vs. StShine Optical Co
Performance |
Timeline |
Taiwan Mobile |
StShine Optical |
Taiwan Mobile and StShine Optical Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Taiwan Mobile and StShine Optical
The main advantage of trading using opposite Taiwan Mobile and StShine Optical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taiwan Mobile position performs unexpectedly, StShine Optical 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 StShine Optical will offset losses from the drop in StShine Optical's long position.Taiwan Mobile vs. Chunghwa Telecom Co | Taiwan Mobile vs. Far EasTone Telecommunications | Taiwan Mobile vs. CTBC Financial Holding | Taiwan Mobile vs. Fubon Financial Holding |
StShine Optical vs. Loop Telecommunication International | StShine Optical vs. Arima Communications Corp | StShine Optical vs. Tai Tung Communication | StShine Optical vs. Huang Hsiang Construction |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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