Correlation Between TBI Motion and Taiwan Chelic

Can any of the company-specific risk be diversified away by investing in both TBI Motion and Taiwan Chelic 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 TBI Motion and Taiwan Chelic into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between TBI Motion Technology and Taiwan Chelic Corp, you can compare the effects of market volatilities on TBI Motion and Taiwan Chelic 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 TBI Motion with a short position of Taiwan Chelic. Check out your portfolio center. Please also check ongoing floating volatility patterns of TBI Motion and Taiwan Chelic.

Diversification Opportunities for TBI Motion and Taiwan Chelic

0.09

Correlation Coefficient

TBI Motion  Taiwan Chelic

Significant diversification

The 3 months correlation between TBI and Taiwan is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding TBI Motion Technology and Taiwan Chelic Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taiwan Chelic Corp and TBI Motion 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 TBI Motion Technology are associated (or correlated) with Taiwan Chelic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taiwan Chelic Corp has no effect on the direction of TBI Motion i.e., TBI Motion and Taiwan Chelic go up and down completely randomly.

Pair Corralation between TBI Motion and Taiwan Chelic

Assuming the 90 days trading horizon TBI Motion Technology is expected to generate 1.08 times more return on investment than Taiwan Chelic. However, TBI Motion is 1.08 times more volatile than Taiwan Chelic Corp. It trades about 0.05 of its potential returns per unit of risk. Taiwan Chelic Corp is currently generating about -0.01 per unit of risk. If you would invest  3,473  in TBI Motion Technology on September 24, 2024 and sell it today you would earn a total of  1,897  from holding TBI Motion Technology or generate 54.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

TBI Motion Technology  vs.  Taiwan Chelic Corp

TBI Motion Technology

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in TBI Motion Technology are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, TBI Motion showed solid returns over the last few months and may actually be approaching a breakup point.

Taiwan Chelic Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Taiwan Chelic Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Taiwan Chelic is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with TBI Motion and Taiwan Chelic

The main advantage of trading using opposite TBI Motion and Taiwan Chelic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TBI Motion position performs unexpectedly, Taiwan Chelic 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 Chelic will offset losses from the drop in Taiwan Chelic's long position.

The idea behind TBI Motion Technology and Taiwan Chelic Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.