Correlation Between Tong Hsing and TECO Electric

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

By analyzing existing cross correlation between Tong Hsing Electronic and TECO Electric Machinery, you can compare the effects of market volatilities on Tong Hsing and TECO Electric 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 Hsing with a short position of TECO Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tong Hsing and TECO Electric.

Diversification Opportunities for Tong Hsing and TECO Electric

0.0

Correlation Coefficient

Tong Hsing  TECO Electric

Pay attention - limited upside

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

Pair Corralation between Tong Hsing and TECO Electric

If you would invest (100.00) in Tong Hsing Electronic on December 21, 2024 and sell it today you would earn a total of  100.00  from holding Tong Hsing Electronic 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 Hsing Electronic  vs.  TECO Electric Machinery

Tong Hsing Electronic

Risk-Adjusted Performance

Very Weak

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

TECO Electric Machinery

Risk-Adjusted Performance

Very Weak

Over the last 90 days TECO Electric Machinery has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, TECO Electric 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 Hsing and TECO Electric

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

The idea behind Tong Hsing Electronic and TECO Electric Machinery 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.