Correlation Between Tong Yang and Tainan Spinning
Can any of the company-specific risk be diversified away by investing in both Tong Yang and Tainan Spinning 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 Tong Yang and Tainan Spinning into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tong Yang Industry and Tainan Spinning Co, you can compare the effects of market volatilities on Tong Yang and Tainan Spinning 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 Tong Yang with a short position of Tainan Spinning. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tong Yang and Tainan Spinning.
Diversification Opportunities for Tong Yang and Tainan Spinning
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Tong and Tainan is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Tong Yang Industry and Tainan Spinning Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tainan Spinning and Tong Yang 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 Tong Yang Industry are associated (or correlated) with Tainan Spinning. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tainan Spinning has no effect on the direction of Tong Yang i.e., Tong Yang and Tainan Spinning go up and down completely randomly.
Pair Corralation between Tong Yang and Tainan Spinning
Assuming the 90 days trading horizon Tong Yang Industry is expected to generate 2.0 times more return on investment than Tainan Spinning. However, Tong Yang is 2.0 times more volatile than Tainan Spinning Co. It trades about 0.0 of its potential returns per unit of risk. Tainan Spinning Co is currently generating about -0.02 per unit of risk. If you would invest 11,800 in Tong Yang Industry on December 2, 2024 and sell it today you would lose (150.00) from holding Tong Yang Industry or give up 1.27% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Tong Yang Industry vs. Tainan Spinning Co
Performance |
Timeline |
Tong Yang Industry |
Tainan Spinning |
Tong Yang and Tainan Spinning Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Tong Yang and Tainan Spinning
The main advantage of trading using opposite Tong Yang and Tainan Spinning positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tong Yang position performs unexpectedly, Tainan Spinning 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 Tainan Spinning will offset losses from the drop in Tainan Spinning's long position.Tong Yang vs. TYC Brother Industrial | Tong Yang vs. Hota Industrial Mfg | Tong Yang vs. Yulon Motor Co | Tong Yang vs. Far Eastern New |
Tainan Spinning vs. Lealea Enterprise Co | Tainan Spinning vs. China Petrochemical Development | Tainan Spinning vs. Li Peng Enterprise | Tainan Spinning vs. Oriental Union Chemical |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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