Correlation Between Tung Ho and Cowealth Medical
Can any of the company-specific risk be diversified away by investing in both Tung Ho and Cowealth Medical 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 Tung Ho and Cowealth Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tung Ho Steel and Cowealth Medical Holding, you can compare the effects of market volatilities on Tung Ho and Cowealth Medical 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 Tung Ho with a short position of Cowealth Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tung Ho and Cowealth Medical.
Diversification Opportunities for Tung Ho and Cowealth Medical
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Tung and Cowealth is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Tung Ho Steel and Cowealth Medical Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cowealth Medical Holding and Tung Ho 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 Tung Ho Steel are associated (or correlated) with Cowealth Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cowealth Medical Holding has no effect on the direction of Tung Ho i.e., Tung Ho and Cowealth Medical go up and down completely randomly.
Pair Corralation between Tung Ho and Cowealth Medical
Assuming the 90 days trading horizon Tung Ho Steel is expected to generate 1.4 times more return on investment than Cowealth Medical. However, Tung Ho is 1.4 times more volatile than Cowealth Medical Holding. It trades about 0.11 of its potential returns per unit of risk. Cowealth Medical Holding is currently generating about -0.02 per unit of risk. If you would invest 7,100 in Tung Ho Steel on December 4, 2024 and sell it today you would earn a total of 510.00 from holding Tung Ho Steel or generate 7.18% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Tung Ho Steel vs. Cowealth Medical Holding
Performance |
Timeline |
Tung Ho Steel |
Cowealth Medical Holding |
Tung Ho and Cowealth Medical Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Tung Ho and Cowealth Medical
The main advantage of trading using opposite Tung Ho and Cowealth Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tung Ho position performs unexpectedly, Cowealth Medical 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 Cowealth Medical will offset losses from the drop in Cowealth Medical's long position.Tung Ho vs. China Steel Corp | Tung Ho vs. Feng Hsin Steel | Tung Ho vs. Ta Chen Stainless | Tung Ho vs. Chung Hung Steel |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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