Correlation Between Est Global and Taiwan Paiho

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

By analyzing existing cross correlation between Est Global Apparel and Taiwan Paiho, you can compare the effects of market volatilities on Est Global and Taiwan Paiho 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 Est Global with a short position of Taiwan Paiho. Check out your portfolio center. Please also check ongoing floating volatility patterns of Est Global and Taiwan Paiho.

Diversification Opportunities for Est Global and Taiwan Paiho

0.01

Correlation Coefficient

Est Global  Taiwan Paiho

Significant diversification

The 3 months correlation between Est and Taiwan is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Est Global Apparel and Taiwan Paiho in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taiwan Paiho and Est Global 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 Est Global Apparel are associated (or correlated) with Taiwan Paiho. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taiwan Paiho has no effect on the direction of Est Global i.e., Est Global and Taiwan Paiho go up and down completely randomly.

Pair Corralation between Est Global and Taiwan Paiho

Assuming the 90 days trading horizon Est Global is expected to generate 3.04 times less return on investment than Taiwan Paiho. In addition to that, Est Global is 1.01 times more volatile than Taiwan Paiho. It trades about 0.02 of its total potential returns per unit of risk. Taiwan Paiho is currently generating about 0.07 per unit of volatility. If you would invest  6,600  in Taiwan Paiho on September 18, 2024 and sell it today you would earn a total of  640.00  from holding Taiwan Paiho or generate 9.7% return on investment over 90 days.

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

Est Global Apparel  vs.  Taiwan Paiho

Est Global Apparel

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Est Global Apparel are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Est Global is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Taiwan Paiho

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Taiwan Paiho are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Taiwan Paiho may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Est Global and Taiwan Paiho

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

The idea behind Est Global Apparel and Taiwan Paiho 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.