Correlation Between WIG 30 and Taiwan Weighted
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By analyzing existing cross correlation between WIG 30 and Taiwan Weighted, you can compare the effects of market volatilities on WIG 30 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 WIG 30 with a short position of Taiwan Weighted. Check out your portfolio center. Please also check ongoing floating volatility patterns of WIG 30 and Taiwan Weighted.
Diversification Opportunities for WIG 30 and Taiwan Weighted
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between WIG and Taiwan is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding WIG 30 and Taiwan Weighted in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taiwan Weighted and WIG 30 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 WIG 30 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 WIG 30 i.e., WIG 30 and Taiwan Weighted go up and down completely randomly.
Pair Corralation between WIG 30 and Taiwan Weighted
Assuming the 90 days trading horizon WIG 30 is expected to generate 1.24 times more return on investment than Taiwan Weighted. However, WIG 30 is 1.24 times more volatile than Taiwan Weighted. It trades about 0.1 of its potential returns per unit of risk. Taiwan Weighted is currently generating about -0.13 per unit of risk. If you would invest 288,920 in WIG 30 on January 4, 2025 and sell it today you would earn a total of 28,434 from holding WIG 30 or generate 9.84% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 87.5% |
Values | Daily Returns |
WIG 30 vs. Taiwan Weighted
Performance |
Timeline |
WIG 30 and Taiwan Weighted Volatility Contrast
Predicted Return Density |
Returns |
WIG 30
Pair trading matchups for WIG 30
Taiwan Weighted
Pair trading matchups for Taiwan Weighted
Pair Trading with WIG 30 and Taiwan Weighted
The main advantage of trading using opposite WIG 30 and Taiwan Weighted positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WIG 30 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.The idea behind WIG 30 and Taiwan Weighted 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.Taiwan Weighted vs. Tai Tung Communication | Taiwan Weighted vs. Intai Technology | Taiwan Weighted vs. ANJI Technology Co | Taiwan Weighted vs. Connection Technology Systems |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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