Correlation Between Taiwan Weighted and WIG 30
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By analyzing existing cross correlation between Taiwan Weighted and WIG 30, you can compare the effects of market volatilities on Taiwan Weighted and WIG 30 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 WIG 30. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taiwan Weighted and WIG 30.
Diversification Opportunities for Taiwan Weighted and WIG 30
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Taiwan and WIG is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Taiwan Weighted and WIG 30 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WIG 30 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 WIG 30. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WIG 30 has no effect on the direction of Taiwan Weighted i.e., Taiwan Weighted and WIG 30 go up and down completely randomly.
Pair Corralation between Taiwan Weighted and WIG 30
Assuming the 90 days trading horizon Taiwan Weighted is expected to under-perform the WIG 30. In addition to that, Taiwan Weighted is 1.36 times more volatile than WIG 30. It trades about -0.01 of its total potential returns per unit of risk. WIG 30 is currently generating about 0.06 per unit of volatility. If you would invest 302,639 in WIG 30 on January 30, 2024 and sell it today you would earn a total of 3,858 from holding WIG 30 or generate 1.27% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 95.0% |
Values | Daily Returns |
Taiwan Weighted vs. WIG 30
Performance |
Timeline |
Taiwan Weighted and WIG 30 Volatility Contrast
Predicted Return Density |
Returns |
Taiwan Weighted
Pair trading matchups for Taiwan Weighted
WIG 30
Pair trading matchups for WIG 30
Pair Trading with Taiwan Weighted and WIG 30
The main advantage of trading using opposite Taiwan Weighted and WIG 30 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taiwan Weighted position performs unexpectedly, WIG 30 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 WIG 30 will offset losses from the drop in WIG 30's long position.Taiwan Weighted vs. Sporton International | Taiwan Weighted vs. SuperAlloy Industrial Co | Taiwan Weighted vs. RiTdisplay Corp | Taiwan Weighted vs. Chung Lien Transportation |
WIG 30 vs. Globe Trade Centre | WIG 30 vs. LSI Software SA | WIG 30 vs. SOFTWARE MANSION SPOLKA | WIG 30 vs. Play2Chill SA |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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