Correlation Between Tehmag Foods and Sunny Friend
Can any of the company-specific risk be diversified away by investing in both Tehmag Foods and Sunny Friend 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 Sunny Friend into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tehmag Foods and Sunny Friend Environmental, you can compare the effects of market volatilities on Tehmag Foods and Sunny Friend 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 Sunny Friend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tehmag Foods and Sunny Friend.
Diversification Opportunities for Tehmag Foods and Sunny Friend
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tehmag and Sunny is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Tehmag Foods and Sunny Friend Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunny Friend Environ 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 Sunny Friend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunny Friend Environ has no effect on the direction of Tehmag Foods i.e., Tehmag Foods and Sunny Friend go up and down completely randomly.
Pair Corralation between Tehmag Foods and Sunny Friend
Assuming the 90 days trading horizon Tehmag Foods is expected to under-perform the Sunny Friend. But the stock apears to be less risky and, when comparing its historical volatility, Tehmag Foods is 4.99 times less risky than Sunny Friend. The stock trades about -0.19 of its potential returns per unit of risk. The Sunny Friend Environmental is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 8,990 in Sunny Friend Environmental on September 6, 2024 and sell it today you would earn a total of 150.00 from holding Sunny Friend Environmental or generate 1.67% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 98.41% |
Values | Daily Returns |
Tehmag Foods vs. Sunny Friend Environmental
Performance |
Timeline |
Tehmag Foods |
Sunny Friend Environ |
Tehmag Foods and Sunny Friend Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Tehmag Foods and Sunny Friend
The main advantage of trading using opposite Tehmag Foods and Sunny Friend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tehmag Foods position performs unexpectedly, Sunny Friend 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 Sunny Friend will offset losses from the drop in Sunny Friend's long position.Tehmag Foods vs. Taiwan Mobile Co | Tehmag Foods vs. Feature Integration Technology | Tehmag Foods vs. Siward Crystal Technology | Tehmag Foods vs. Arima Communications Corp |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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