Correlation Between Tung Ho and Mitake Information
Can any of the company-specific risk be diversified away by investing in both Tung Ho and Mitake Information 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 Mitake Information 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 Mitake Information, you can compare the effects of market volatilities on Tung Ho and Mitake Information 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 Mitake Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tung Ho and Mitake Information.
Diversification Opportunities for Tung Ho and Mitake Information
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Tung and Mitake is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Tung Ho Steel and Mitake Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitake Information 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 Mitake Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mitake Information has no effect on the direction of Tung Ho i.e., Tung Ho and Mitake Information go up and down completely randomly.
Pair Corralation between Tung Ho and Mitake Information
Assuming the 90 days trading horizon Tung Ho Steel is expected to under-perform the Mitake Information. In addition to that, Tung Ho is 1.64 times more volatile than Mitake Information. It trades about -0.11 of its total potential returns per unit of risk. Mitake Information is currently generating about 0.21 per unit of volatility. If you would invest 6,320 in Mitake Information on September 14, 2024 and sell it today you would earn a total of 610.00 from holding Mitake Information or generate 9.65% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Tung Ho Steel vs. Mitake Information
Performance |
Timeline |
Tung Ho Steel |
Mitake Information |
Tung Ho and Mitake Information Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Tung Ho and Mitake Information
The main advantage of trading using opposite Tung Ho and Mitake Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tung Ho position performs unexpectedly, Mitake Information 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 Mitake Information will offset losses from the drop in Mitake Information'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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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