Correlation Between Tehmag Foods and Sinopac Financial

Can any of the company-specific risk be diversified away by investing in both Tehmag Foods and Sinopac Financial 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 Tehmag Foods and Sinopac Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Tehmag Foods and Sinopac Financial Holdings, you can compare the effects of market volatilities on Tehmag Foods and Sinopac Financial 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 Tehmag Foods with a short position of Sinopac Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tehmag Foods and Sinopac Financial.

Diversification Opportunities for Tehmag Foods and Sinopac Financial

-0.23

Correlation Coefficient

Tehmag Foods  Sinopac Financial

Very good diversification

The 3 months correlation between Tehmag and Sinopac is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Tehmag Foods and Sinopac Financial Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinopac Financial and Tehmag Foods 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 Tehmag Foods are associated (or correlated) with Sinopac Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinopac Financial has no effect on the direction of Tehmag Foods i.e., Tehmag Foods and Sinopac Financial go up and down completely randomly.

Pair Corralation between Tehmag Foods and Sinopac Financial

Assuming the 90 days trading horizon Tehmag Foods is expected to generate 0.39 times more return on investment than Sinopac Financial. However, Tehmag Foods is 2.57 times less risky than Sinopac Financial. It trades about 0.05 of its potential returns per unit of risk. Sinopac Financial Holdings is currently generating about -0.04 per unit of risk. If you would invest  31,200  in Tehmag Foods on October 22, 2024 and sell it today you would earn a total of  500.00  from holding Tehmag Foods or generate 1.6% return on investment over 90 days.

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

Tehmag Foods  vs.  Sinopac Financial Holdings

Tehmag Foods

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Tehmag Foods are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Tehmag Foods is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Sinopac Financial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sinopac Financial Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Sinopac Financial 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 Tehmag Foods and Sinopac Financial

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

The idea behind Tehmag Foods and Sinopac Financial Holdings 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.