Correlation Between Taiwan Chinsan and ANJI Technology
Can any of the company-specific risk be diversified away by investing in both Taiwan Chinsan and ANJI Technology 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 ANJI Technology 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 ANJI Technology Co, you can compare the effects of market volatilities on Taiwan Chinsan and ANJI Technology 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 ANJI Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taiwan Chinsan and ANJI Technology.
Diversification Opportunities for Taiwan Chinsan and ANJI Technology
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Taiwan and ANJI is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Taiwan Chinsan Electronic and ANJI Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANJI Technology 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 ANJI Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANJI Technology has no effect on the direction of Taiwan Chinsan i.e., Taiwan Chinsan and ANJI Technology go up and down completely randomly.
Pair Corralation between Taiwan Chinsan and ANJI Technology
Assuming the 90 days trading horizon Taiwan Chinsan Electronic is expected to under-perform the ANJI Technology. But the stock apears to be less risky and, when comparing its historical volatility, Taiwan Chinsan Electronic is 1.14 times less risky than ANJI Technology. The stock trades about -0.02 of its potential returns per unit of risk. The ANJI Technology Co is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 2,825 in ANJI Technology Co on December 29, 2024 and sell it today you would earn a total of 625.00 from holding ANJI Technology Co or generate 22.12% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Taiwan Chinsan Electronic vs. ANJI Technology Co
Performance |
Timeline |
Taiwan Chinsan Electronic |
ANJI Technology |
Taiwan Chinsan and ANJI Technology Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Taiwan Chinsan and ANJI Technology
The main advantage of trading using opposite Taiwan Chinsan and ANJI Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taiwan Chinsan position performs unexpectedly, ANJI Technology 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 ANJI Technology will offset losses from the drop in ANJI Technology's long position.Taiwan Chinsan vs. Simple Mart Retail | Taiwan Chinsan vs. RiTdisplay Corp | Taiwan Chinsan vs. Union Bank of | Taiwan Chinsan vs. Mega Financial Holding |
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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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