Correlation Between Tong Yang and Hota Industrial
Can any of the company-specific risk be diversified away by investing in both Tong Yang and Hota 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 Tong Yang and Hota Industrial 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 Hota Industrial Mfg, you can compare the effects of market volatilities on Tong Yang and Hota 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 Tong Yang with a short position of Hota Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tong Yang and Hota Industrial.
Diversification Opportunities for Tong Yang and Hota Industrial
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tong and Hota is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Tong Yang Industry and Hota Industrial Mfg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hota Industrial Mfg 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 Hota Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hota Industrial Mfg has no effect on the direction of Tong Yang i.e., Tong Yang and Hota Industrial go up and down completely randomly.
Pair Corralation between Tong Yang and Hota Industrial
Assuming the 90 days trading horizon Tong Yang Industry is expected to generate 1.09 times more return on investment than Hota Industrial. However, Tong Yang is 1.09 times more volatile than Hota Industrial Mfg. It trades about 0.1 of its potential returns per unit of risk. Hota Industrial Mfg is currently generating about 0.0 per unit of risk. If you would invest 4,355 in Tong Yang Industry on October 5, 2024 and sell it today you would earn a total of 6,845 from holding Tong Yang Industry or generate 157.18% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Tong Yang Industry vs. Hota Industrial Mfg
Performance |
Timeline |
Tong Yang Industry |
Hota Industrial Mfg |
Tong Yang and Hota Industrial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Tong Yang and Hota Industrial
The main advantage of trading using opposite Tong Yang and Hota Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tong Yang position performs unexpectedly, Hota 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 Hota Industrial will offset losses from the drop in Hota Industrial'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 |
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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