Correlation Between Tong Tai and Thunder Tiger

Can any of the company-specific risk be diversified away by investing in both Tong Tai and Thunder Tiger 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 Tong Tai and Thunder Tiger into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Tong Tai Machine Tool and Thunder Tiger Corp, you can compare the effects of market volatilities on Tong Tai and Thunder Tiger 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 Tong Tai with a short position of Thunder Tiger. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tong Tai and Thunder Tiger.

Diversification Opportunities for Tong Tai and Thunder Tiger

0.0

Correlation Coefficient

Tong Tai  Thunder Tiger

Pay attention - limited upside

The 3 months correlation between Tong and Thunder is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Tong Tai Machine Tool and Thunder Tiger Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thunder Tiger Corp and Tong Tai 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 Tong Tai Machine Tool are associated (or correlated) with Thunder Tiger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thunder Tiger Corp has no effect on the direction of Tong Tai i.e., Tong Tai and Thunder Tiger go up and down completely randomly.

Pair Corralation between Tong Tai and Thunder Tiger

If you would invest (100.00) in Thunder Tiger Corp on September 14, 2024 and sell it today you would earn a total of  100.00  from holding Thunder Tiger Corp or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Tong Tai Machine Tool  vs.  Thunder Tiger Corp

Tong Tai Machine

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tong Tai Machine Tool 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 January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Thunder Tiger Corp

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Thunder Tiger Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Thunder Tiger is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Tong Tai and Thunder Tiger

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

The idea behind Tong Tai Machine Tool and Thunder Tiger Corp 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.

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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 Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.