Correlation Between Great Taipei and Farglory Land
Can any of the company-specific risk be diversified away by investing in both Great Taipei and Farglory Land 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 Great Taipei and Farglory Land into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Great Taipei Gas and Farglory Land Development, you can compare the effects of market volatilities on Great Taipei and Farglory Land 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 Great Taipei with a short position of Farglory Land. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great Taipei and Farglory Land.
Diversification Opportunities for Great Taipei and Farglory Land
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Great and Farglory is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Great Taipei Gas and Farglory Land Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Farglory Land Development and Great Taipei 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 Great Taipei Gas are associated (or correlated) with Farglory Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Farglory Land Development has no effect on the direction of Great Taipei i.e., Great Taipei and Farglory Land go up and down completely randomly.
Pair Corralation between Great Taipei and Farglory Land
Assuming the 90 days trading horizon Great Taipei Gas is expected to under-perform the Farglory Land. But the stock apears to be less risky and, when comparing its historical volatility, Great Taipei Gas is 12.63 times less risky than Farglory Land. The stock trades about -0.1 of its potential returns per unit of risk. The Farglory Land Development is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 7,490 in Farglory Land Development on September 15, 2024 and sell it today you would earn a total of 250.00 from holding Farglory Land Development or generate 3.34% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Great Taipei Gas vs. Farglory Land Development
Performance |
Timeline |
Great Taipei Gas |
Farglory Land Development |
Great Taipei and Farglory Land Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Great Taipei and Farglory Land
The main advantage of trading using opposite Great Taipei and Farglory Land positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great Taipei position performs unexpectedly, Farglory Land 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 Farglory Land will offset losses from the drop in Farglory Land's long position.Great Taipei vs. Taiwan Secom Co | Great Taipei vs. Taiwan Shin Kong | Great Taipei vs. Taiwan Cogeneration Corp | Great Taipei vs. Ruentex Development Co |
Farglory Land vs. Highwealth Construction Corp | Farglory Land vs. Huaku Development Co | Farglory Land vs. Chong Hong Construction | Farglory Land vs. Taiwan Fertilizer Co |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
FinTech Suite Use AI to screen and filter profitable investment opportunities | |
Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |