Correlation Between Taiwan Weighted and PSI 20
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By analyzing existing cross correlation between Taiwan Weighted and PSI 20 Stock, you can compare the effects of market volatilities on Taiwan Weighted and PSI 20 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 Weighted with a short position of PSI 20. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taiwan Weighted and PSI 20.
Diversification Opportunities for Taiwan Weighted and PSI 20
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Taiwan and PSI is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Taiwan Weighted and PSI 20 Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PSI 20 Stock and Taiwan Weighted 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 Weighted are associated (or correlated) with PSI 20. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PSI 20 Stock has no effect on the direction of Taiwan Weighted i.e., Taiwan Weighted and PSI 20 go up and down completely randomly.
Pair Corralation between Taiwan Weighted and PSI 20
Assuming the 90 days trading horizon Taiwan Weighted is expected to under-perform the PSI 20. But the index apears to be less risky and, when comparing its historical volatility, Taiwan Weighted is 1.14 times less risky than PSI 20. The index trades about -0.13 of its potential returns per unit of risk. The PSI 20 Stock is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 643,864 in PSI 20 Stock on August 30, 2024 and sell it today you would lose (2,063) from holding PSI 20 Stock or give up 0.32% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 95.45% |
Values | Daily Returns |
Taiwan Weighted vs. PSI 20 Stock
Performance |
Timeline |
Taiwan Weighted and PSI 20 Volatility Contrast
Predicted Return Density |
Returns |
Taiwan Weighted
Pair trading matchups for Taiwan Weighted
Pair Trading with Taiwan Weighted and PSI 20
The main advantage of trading using opposite Taiwan Weighted and PSI 20 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taiwan Weighted position performs unexpectedly, PSI 20 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 PSI 20 will offset losses from the drop in PSI 20's long position.Taiwan Weighted vs. V Tac Technology Co | Taiwan Weighted vs. Sesoda Corp | Taiwan Weighted vs. Asmedia Technology | Taiwan Weighted vs. Oceanic Beverages 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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