Correlation Between Yageo Corp and Tong Hsing
Can any of the company-specific risk be diversified away by investing in both Yageo Corp and Tong Hsing 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 Yageo Corp and Tong Hsing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yageo Corp and Tong Hsing Electronic, you can compare the effects of market volatilities on Yageo Corp and Tong Hsing 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 Yageo Corp with a short position of Tong Hsing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yageo Corp and Tong Hsing.
Diversification Opportunities for Yageo Corp and Tong Hsing
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Yageo and Tong is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Yageo Corp and Tong Hsing Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tong Hsing Electronic and Yageo Corp 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 Yageo Corp are associated (or correlated) with Tong Hsing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tong Hsing Electronic has no effect on the direction of Yageo Corp i.e., Yageo Corp and Tong Hsing go up and down completely randomly.
Pair Corralation between Yageo Corp and Tong Hsing
Assuming the 90 days trading horizon Yageo Corp is expected to generate 1.06 times more return on investment than Tong Hsing. However, Yageo Corp is 1.06 times more volatile than Tong Hsing Electronic. It trades about -0.03 of its potential returns per unit of risk. Tong Hsing Electronic is currently generating about -0.13 per unit of risk. If you would invest 53,600 in Yageo Corp on December 29, 2024 and sell it today you would lose (2,600) from holding Yageo Corp or give up 4.85% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Yageo Corp vs. Tong Hsing Electronic
Performance |
Timeline |
Yageo Corp |
Tong Hsing Electronic |
Yageo Corp and Tong Hsing Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Yageo Corp and Tong Hsing
The main advantage of trading using opposite Yageo Corp and Tong Hsing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yageo Corp position performs unexpectedly, Tong Hsing 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 Tong Hsing will offset losses from the drop in Tong Hsing's long position.Yageo Corp vs. Gamania Digital Entertainment | Yageo Corp vs. Holiday Entertainment Co | Yageo Corp vs. GMI Technology | Yageo Corp vs. Feature Integration Technology |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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