Correlation Between Flexium Interconnect and Taiwan Navigation

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

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

Diversification Opportunities for Flexium Interconnect and Taiwan Navigation

0.29

Correlation Coefficient

Flexium Interconnect  Taiwan Navigation

Modest diversification

The 3 months correlation between Flexium and Taiwan is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Flexium Interconnect and Taiwan Navigation Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taiwan Navigation and Flexium Interconnect 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 Flexium Interconnect are associated (or correlated) with Taiwan Navigation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taiwan Navigation has no effect on the direction of Flexium Interconnect i.e., Flexium Interconnect and Taiwan Navigation go up and down completely randomly.

Pair Corralation between Flexium Interconnect and Taiwan Navigation

Assuming the 90 days trading horizon Flexium Interconnect is expected to under-perform the Taiwan Navigation. In addition to that, Flexium Interconnect is 1.98 times more volatile than Taiwan Navigation Co. It trades about 0.0 of its total potential returns per unit of risk. Taiwan Navigation Co is currently generating about 0.17 per unit of volatility. If you would invest  2,925  in Taiwan Navigation Co on December 22, 2024 and sell it today you would earn a total of  315.00  from holding Taiwan Navigation Co or generate 10.77% return on investment over 90 days.

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

Flexium Interconnect  vs.  Taiwan Navigation Co

Flexium Interconnect

Risk-Adjusted Performance

Very Weak

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

Taiwan Navigation

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Taiwan Navigation Co are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Taiwan Navigation may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Flexium Interconnect and Taiwan Navigation

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

The idea behind Flexium Interconnect and Taiwan Navigation 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.