Correlation Between Athens General and Taiwan Weighted
Can any of the company-specific risk be diversified away by investing in both Athens General and Taiwan Weighted 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 Athens General and Taiwan Weighted into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Athens General Composite and Taiwan Weighted, you can compare the effects of market volatilities on Athens General and Taiwan Weighted 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 Athens General with a short position of Taiwan Weighted. Check out your portfolio center. Please also check ongoing floating volatility patterns of Athens General and Taiwan Weighted.
Diversification Opportunities for Athens General and Taiwan Weighted
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Athens and Taiwan is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Athens General Composite and Taiwan Weighted in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taiwan Weighted and Athens General 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 Athens General Composite are associated (or correlated) with Taiwan Weighted. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taiwan Weighted has no effect on the direction of Athens General i.e., Athens General and Taiwan Weighted go up and down completely randomly.
Pair Corralation between Athens General and Taiwan Weighted
Assuming the 90 days trading horizon Athens General Composite is expected to generate 0.72 times more return on investment than Taiwan Weighted. However, Athens General Composite is 1.38 times less risky than Taiwan Weighted. It trades about 0.2 of its potential returns per unit of risk. Taiwan Weighted is currently generating about -0.02 per unit of risk. If you would invest 139,384 in Athens General Composite on January 29, 2024 and sell it today you would earn a total of 6,114 from holding Athens General Composite or generate 4.39% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Athens General Composite vs. Taiwan Weighted
Performance |
Timeline |
Athens General and Taiwan Weighted Volatility Contrast
Predicted Return Density |
Returns |
Athens General Composite
Pair trading matchups for Athens General
Taiwan Weighted
Pair trading matchups for Taiwan Weighted
Pair Trading with Athens General and Taiwan Weighted
The main advantage of trading using opposite Athens General and Taiwan Weighted positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Athens General position performs unexpectedly, Taiwan Weighted 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 Taiwan Weighted will offset losses from the drop in Taiwan Weighted's long position.Athens General vs. Thrace Plastics Holding | Athens General vs. Sato office and | Athens General vs. General Commercial Industrial | Athens General vs. Daios Plastics SA |
Taiwan Weighted vs. Da Cin Construction Co | Taiwan Weighted vs. Hunya Foods Co | Taiwan Weighted vs. Oceanic Beverages Co | Taiwan Weighted vs. Feng Ching Metal |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
FinTech Suite Use AI to screen and filter profitable investment opportunities | |
Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
Share Portfolio Track or share privately all of your investments from the convenience of any device |