Correlation Between Tong Hsing and CviLux Corp

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

Diversification Opportunities for Tong Hsing and CviLux Corp

-0.16

Correlation Coefficient

Tong Hsing  CviLux Corp

Good diversification

The 3 months correlation between Tong and CviLux is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Tong Hsing Electronic and CviLux Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CviLux Corp 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 CviLux Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CviLux Corp has no effect on the direction of Tong Hsing i.e., Tong Hsing and CviLux Corp go up and down completely randomly.

Pair Corralation between Tong Hsing and CviLux Corp

Assuming the 90 days trading horizon Tong Hsing Electronic is expected to under-perform the CviLux Corp. In addition to that, Tong Hsing is 1.16 times more volatile than CviLux Corp. It trades about -0.12 of its total potential returns per unit of risk. CviLux Corp is currently generating about 0.13 per unit of volatility. If you would invest  4,760  in CviLux Corp on December 20, 2024 and sell it today you would earn a total of  530.00  from holding CviLux Corp or generate 11.13% return on investment over 90 days.

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

Tong Hsing Electronic  vs.  CviLux Corp

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 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.

CviLux Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CviLux Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, CviLux Corp showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Tong Hsing and CviLux Corp

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

The idea behind Tong Hsing Electronic and CviLux 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.

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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.