Correlation Between Ju Teng and Deltamac Taiwan

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

By analyzing existing cross correlation between Ju Teng International and Deltamac Taiwan Co, you can compare the effects of market volatilities on Ju Teng and Deltamac Taiwan 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 Ju Teng with a short position of Deltamac Taiwan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ju Teng and Deltamac Taiwan.

Diversification Opportunities for Ju Teng and Deltamac Taiwan

-0.88

Correlation Coefficient

Ju Teng  Deltamac Taiwan

Pay attention - limited upside

The 3 months correlation between 9136 and Deltamac is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Ju Teng International and Deltamac Taiwan Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deltamac Taiwan and Ju Teng 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 Ju Teng International are associated (or correlated) with Deltamac Taiwan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deltamac Taiwan has no effect on the direction of Ju Teng i.e., Ju Teng and Deltamac Taiwan go up and down completely randomly.

Pair Corralation between Ju Teng and Deltamac Taiwan

Assuming the 90 days trading horizon Ju Teng International is expected to under-perform the Deltamac Taiwan. But the stock apears to be less risky and, when comparing its historical volatility, Ju Teng International is 5.83 times less risky than Deltamac Taiwan. The stock trades about -0.04 of its potential returns per unit of risk. The Deltamac Taiwan Co is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  10,100  in Deltamac Taiwan Co on June 30, 2024 and sell it today you would earn a total of  1,250  from holding Deltamac Taiwan Co or generate 12.38% return on investment over 90 days.

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

Ju Teng International  vs.  Deltamac Taiwan Co

Ju Teng International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ju Teng International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in October 2024. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Deltamac Taiwan

Risk-Adjusted Performance

25 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Deltamac Taiwan Co are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Deltamac Taiwan showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ju Teng and Deltamac Taiwan

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

The idea behind Ju Teng International and Deltamac Taiwan Co 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.

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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.