Correlation Between Tah Hsin and Makalot Industrial
Can any of the company-specific risk be diversified away by investing in both Tah Hsin and Makalot Industrial 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 Tah Hsin and Makalot Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tah Hsin Industrial and Makalot Industrial Co, you can compare the effects of market volatilities on Tah Hsin and Makalot Industrial 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 Tah Hsin with a short position of Makalot Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tah Hsin and Makalot Industrial.
Diversification Opportunities for Tah Hsin and Makalot Industrial
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Tah and Makalot is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Tah Hsin Industrial and Makalot Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Makalot Industrial and Tah Hsin 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 Tah Hsin Industrial are associated (or correlated) with Makalot Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Makalot Industrial has no effect on the direction of Tah Hsin i.e., Tah Hsin and Makalot Industrial go up and down completely randomly.
Pair Corralation between Tah Hsin and Makalot Industrial
Assuming the 90 days trading horizon Tah Hsin Industrial is expected to generate 0.15 times more return on investment than Makalot Industrial. However, Tah Hsin Industrial is 6.75 times less risky than Makalot Industrial. It trades about -0.05 of its potential returns per unit of risk. Makalot Industrial Co is currently generating about -0.08 per unit of risk. If you would invest 7,060 in Tah Hsin Industrial on September 25, 2024 and sell it today you would lose (60.00) from holding Tah Hsin Industrial or give up 0.85% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Tah Hsin Industrial vs. Makalot Industrial Co
Performance |
Timeline |
Tah Hsin Industrial |
Makalot Industrial |
Tah Hsin and Makalot Industrial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Tah Hsin and Makalot Industrial
The main advantage of trading using opposite Tah Hsin and Makalot Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tah Hsin position performs unexpectedly, Makalot Industrial 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 Makalot Industrial will offset losses from the drop in Makalot Industrial's long position.Tah Hsin vs. Merida Industry Co | Tah Hsin vs. Cheng Shin Rubber | Tah Hsin vs. Uni President Enterprises Corp | Tah Hsin vs. Pou Chen Corp |
Makalot Industrial vs. Merida Industry Co | Makalot Industrial vs. Cheng Shin Rubber | Makalot Industrial vs. Uni President Enterprises Corp | Makalot Industrial vs. Pou Chen Corp |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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