Correlation Between Taiwan Chinsan and Top Union
Can any of the company-specific risk be diversified away by investing in both Taiwan Chinsan and Top Union 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 Chinsan and Top Union into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Taiwan Chinsan Electronic and Top Union Electronics, you can compare the effects of market volatilities on Taiwan Chinsan and Top Union 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 Chinsan with a short position of Top Union. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taiwan Chinsan and Top Union.
Diversification Opportunities for Taiwan Chinsan and Top Union
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Taiwan and Top is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Taiwan Chinsan Electronic and Top Union Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Top Union Electronics and Taiwan Chinsan 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 Chinsan Electronic are associated (or correlated) with Top Union. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Top Union Electronics has no effect on the direction of Taiwan Chinsan i.e., Taiwan Chinsan and Top Union go up and down completely randomly.
Pair Corralation between Taiwan Chinsan and Top Union
Assuming the 90 days trading horizon Taiwan Chinsan Electronic is expected to under-perform the Top Union. In addition to that, Taiwan Chinsan is 3.62 times more volatile than Top Union Electronics. It trades about -0.02 of its total potential returns per unit of risk. Top Union Electronics is currently generating about 0.14 per unit of volatility. If you would invest 3,270 in Top Union Electronics on December 27, 2024 and sell it today you would earn a total of 230.00 from holding Top Union Electronics or generate 7.03% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Taiwan Chinsan Electronic vs. Top Union Electronics
Performance |
Timeline |
Taiwan Chinsan Electronic |
Top Union Electronics |
Taiwan Chinsan and Top Union Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Taiwan Chinsan and Top Union
The main advantage of trading using opposite Taiwan Chinsan and Top Union positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taiwan Chinsan position performs unexpectedly, Top Union 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 Top Union will offset losses from the drop in Top Union's long position.Taiwan Chinsan vs. LongDa Construction Development | Taiwan Chinsan vs. Chinese Maritime Transport | Taiwan Chinsan vs. Fong Chien Construction | Taiwan Chinsan vs. U Ming Marine Transport |
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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