Correlation Between Tung Thih and K Way

Can any of the company-specific risk be diversified away by investing in both Tung Thih and K Way 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 K Way 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 K Way Information, you can compare the effects of market volatilities on Tung Thih and K Way 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 K Way. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tung Thih and K Way.

Diversification Opportunities for Tung Thih and K Way

-0.46

Correlation Coefficient

Tung Thih  K Way

Very good diversification

The 3 months correlation between Tung and 5201 is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Tung Thih Electronic and K Way Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on K Way Information 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 K Way. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of K Way Information has no effect on the direction of Tung Thih i.e., Tung Thih and K Way go up and down completely randomly.

Pair Corralation between Tung Thih and K Way

Assuming the 90 days trading horizon Tung Thih Electronic is expected to generate 28.83 times more return on investment than K Way. However, Tung Thih is 28.83 times more volatile than K Way Information. It trades about 0.06 of its potential returns per unit of risk. K Way Information is currently generating about 0.03 per unit of risk. If you would invest  13,267  in Tung Thih Electronic on December 4, 2024 and sell it today you would lose (4,617) from holding Tung Thih Electronic or give up 34.8% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Tung Thih Electronic  vs.  K Way Information

Tung Thih Electronic

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tung Thih Electronic has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

K Way Information

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in K Way Information are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, K Way showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Tung Thih and K Way

The main advantage of trading using opposite Tung Thih and K Way positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tung Thih position performs unexpectedly, K Way 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 K Way will offset losses from the drop in K Way's long position.

The idea behind Tung Thih Electronic and K Way Information pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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.