Correlation Between P Duke and Ta Ya

Can any of the company-specific risk be diversified away by investing in both P Duke and Ta Ya 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 P Duke and Ta Ya into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between P Duke Technology Co and Ta Ya Electric, you can compare the effects of market volatilities on P Duke and Ta Ya 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 P Duke with a short position of Ta Ya. Check out your portfolio center. Please also check ongoing floating volatility patterns of P Duke and Ta Ya.

Diversification Opportunities for P Duke and Ta Ya

0.09

Correlation Coefficient

P Duke  Ta Ya

Significant diversification

The 3 months correlation between 8109 and 1609 is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding P Duke Technology Co and Ta Ya Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ta Ya Electric and P Duke 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 P Duke Technology Co are associated (or correlated) with Ta Ya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ta Ya Electric has no effect on the direction of P Duke i.e., P Duke and Ta Ya go up and down completely randomly.

Pair Corralation between P Duke and Ta Ya

Assuming the 90 days trading horizon P Duke is expected to generate 1.36 times less return on investment than Ta Ya. But when comparing it to its historical volatility, P Duke Technology Co is 2.22 times less risky than Ta Ya. It trades about 0.04 of its potential returns per unit of risk. Ta Ya Electric is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  4,410  in Ta Ya Electric on December 26, 2024 and sell it today you would earn a total of  75.00  from holding Ta Ya Electric or generate 1.7% return on investment over 90 days.

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

P Duke Technology Co  vs.  Ta Ya Electric

P Duke Technology

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in P Duke Technology Co are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, P Duke is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Ta Ya Electric

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ta Ya Electric are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Ta Ya 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 P Duke and Ta Ya

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

The idea behind P Duke Technology Co and Ta Ya Electric 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.