Correlation Between Tung Thih and Silicon Power
Can any of the company-specific risk be diversified away by investing in both Tung Thih and Silicon Power 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 Thih and Silicon Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tung Thih Electronic and Silicon Power Computer, you can compare the effects of market volatilities on Tung Thih and Silicon Power 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 Thih with a short position of Silicon Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tung Thih and Silicon Power.
Diversification Opportunities for Tung Thih and Silicon Power
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Tung and Silicon is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Tung Thih Electronic and Silicon Power Computer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silicon Power Computer and Tung Thih 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 Thih Electronic are associated (or correlated) with Silicon Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silicon Power Computer has no effect on the direction of Tung Thih i.e., Tung Thih and Silicon Power go up and down completely randomly.
Pair Corralation between Tung Thih and Silicon Power
Assuming the 90 days trading horizon Tung Thih Electronic is expected to under-perform the Silicon Power. But the stock apears to be less risky and, when comparing its historical volatility, Tung Thih Electronic is 1.26 times less risky than Silicon Power. The stock trades about -0.19 of its potential returns per unit of risk. The Silicon Power Computer is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 3,085 in Silicon Power Computer on December 30, 2024 and sell it today you would lose (70.00) from holding Silicon Power Computer or give up 2.27% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Tung Thih Electronic vs. Silicon Power Computer
Performance |
Timeline |
Tung Thih Electronic |
Silicon Power Computer |
Tung Thih and Silicon Power Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Tung Thih and Silicon Power
The main advantage of trading using opposite Tung Thih and Silicon Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tung Thih position performs unexpectedly, Silicon Power 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 Silicon Power will offset losses from the drop in Silicon Power's long position.Tung Thih vs. Hota Industrial Mfg | Tung Thih vs. BizLink Holding | Tung Thih vs. Cub Elecparts | Tung Thih vs. Hu Lane Associate |
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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