Correlation Between Tigerair Taiwan and Golden Biotechnology
Can any of the company-specific risk be diversified away by investing in both Tigerair Taiwan and Golden Biotechnology 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 Tigerair Taiwan and Golden Biotechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tigerair Taiwan Co and Golden Biotechnology, you can compare the effects of market volatilities on Tigerair Taiwan and Golden Biotechnology 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 Tigerair Taiwan with a short position of Golden Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tigerair Taiwan and Golden Biotechnology.
Diversification Opportunities for Tigerair Taiwan and Golden Biotechnology
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Tigerair and Golden is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Tigerair Taiwan Co and Golden Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Biotechnology and Tigerair Taiwan 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 Tigerair Taiwan Co are associated (or correlated) with Golden Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Biotechnology has no effect on the direction of Tigerair Taiwan i.e., Tigerair Taiwan and Golden Biotechnology go up and down completely randomly.
Pair Corralation between Tigerair Taiwan and Golden Biotechnology
Assuming the 90 days trading horizon Tigerair Taiwan Co is expected to generate 1.52 times more return on investment than Golden Biotechnology. However, Tigerair Taiwan is 1.52 times more volatile than Golden Biotechnology. It trades about -0.02 of its potential returns per unit of risk. Golden Biotechnology is currently generating about -0.19 per unit of risk. If you would invest 7,500 in Tigerair Taiwan Co on September 24, 2024 and sell it today you would lose (140.00) from holding Tigerair Taiwan Co or give up 1.87% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Tigerair Taiwan Co vs. Golden Biotechnology
Performance |
Timeline |
Tigerair Taiwan |
Golden Biotechnology |
Tigerair Taiwan and Golden Biotechnology Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Tigerair Taiwan and Golden Biotechnology
The main advantage of trading using opposite Tigerair Taiwan and Golden Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tigerair Taiwan position performs unexpectedly, Golden Biotechnology 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 Golden Biotechnology will offset losses from the drop in Golden Biotechnology's long position.Tigerair Taiwan vs. Taiwan Semiconductor Manufacturing | Tigerair Taiwan vs. Hon Hai Precision | Tigerair Taiwan vs. MediaTek | Tigerair Taiwan vs. Chunghwa Telecom Co |
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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