Correlation Between Ta Liang and Airtac International

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

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

Diversification Opportunities for Ta Liang and Airtac International

0.71

Correlation Coefficient

Ta Liang  Airtac International

Poor diversification

The 3 months correlation between 3167 and Airtac is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Ta Liang Technology and Airtac International Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airtac International and Ta Liang 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 Ta Liang Technology are associated (or correlated) with Airtac International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Airtac International has no effect on the direction of Ta Liang i.e., Ta Liang and Airtac International go up and down completely randomly.

Pair Corralation between Ta Liang and Airtac International

Assuming the 90 days trading horizon Ta Liang Technology is expected to under-perform the Airtac International. In addition to that, Ta Liang is 1.87 times more volatile than Airtac International Group. It trades about -0.15 of its total potential returns per unit of risk. Airtac International Group is currently generating about -0.03 per unit of volatility. If you would invest  91,400  in Airtac International Group on October 22, 2024 and sell it today you would lose (5,100) from holding Airtac International Group or give up 5.58% of portfolio value over 90 days.

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

Ta Liang Technology  vs.  Airtac International Group

Ta Liang Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ta Liang Technology 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.

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 fairly stable basic indicators, Airtac International 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 Ta Liang and Airtac International

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

The idea behind Ta Liang Technology and Airtac International Group 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.