Correlation Between Excellence Optoelectronic and Tung Thih
Can any of the company-specific risk be diversified away by investing in both Excellence Optoelectronic and Tung Thih 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 Excellence Optoelectronic and Tung Thih into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Excellence Optoelectronic and Tung Thih Electronic, you can compare the effects of market volatilities on Excellence Optoelectronic and Tung Thih 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 Excellence Optoelectronic with a short position of Tung Thih. Check out your portfolio center. Please also check ongoing floating volatility patterns of Excellence Optoelectronic and Tung Thih.
Diversification Opportunities for Excellence Optoelectronic and Tung Thih
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Excellence and Tung is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Excellence Optoelectronic and Tung Thih Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tung Thih Electronic and Excellence Optoelectronic 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 Excellence Optoelectronic are associated (or correlated) with Tung Thih. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tung Thih Electronic has no effect on the direction of Excellence Optoelectronic i.e., Excellence Optoelectronic and Tung Thih go up and down completely randomly.
Pair Corralation between Excellence Optoelectronic and Tung Thih
Assuming the 90 days trading horizon Excellence Optoelectronic is expected to generate 1.37 times more return on investment than Tung Thih. However, Excellence Optoelectronic is 1.37 times more volatile than Tung Thih Electronic. It trades about 0.14 of its potential returns per unit of risk. Tung Thih Electronic is currently generating about 0.16 per unit of risk. If you would invest 2,515 in Excellence Optoelectronic on December 5, 2024 and sell it today you would earn a total of 105.00 from holding Excellence Optoelectronic or generate 4.17% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Excellence Optoelectronic vs. Tung Thih Electronic
Performance |
Timeline |
Excellence Optoelectronic |
Tung Thih Electronic |
Excellence Optoelectronic and Tung Thih Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Excellence Optoelectronic and Tung Thih
The main advantage of trading using opposite Excellence Optoelectronic and Tung Thih positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Excellence Optoelectronic position performs unexpectedly, Tung Thih 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 Tung Thih will offset losses from the drop in Tung Thih's long position.Excellence Optoelectronic vs. Hota Industrial Mfg | Excellence Optoelectronic vs. BizLink Holding | Excellence Optoelectronic vs. Tong Hsing Electronic | Excellence Optoelectronic vs. SDI Corp |
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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