Correlation Between Tingyi Holding and I Hwa

Can any of the company-specific risk be diversified away by investing in both Tingyi Holding and I Hwa 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 Tingyi Holding and I Hwa into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Tingyi Holding Corp and I Hwa Industrial Co, you can compare the effects of market volatilities on Tingyi Holding and I Hwa 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 Tingyi Holding with a short position of I Hwa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tingyi Holding and I Hwa.

Diversification Opportunities for Tingyi Holding and I Hwa

-0.04

Correlation Coefficient

Tingyi Holding  I Hwa

Good diversification

The 3 months correlation between Tingyi and 1456 is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Tingyi Holding Corp and I Hwa Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on I Hwa Industrial and Tingyi Holding 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 Tingyi Holding Corp are associated (or correlated) with I Hwa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of I Hwa Industrial has no effect on the direction of Tingyi Holding i.e., Tingyi Holding and I Hwa go up and down completely randomly.

Pair Corralation between Tingyi Holding and I Hwa

Assuming the 90 days trading horizon Tingyi Holding Corp is expected to generate 1.02 times more return on investment than I Hwa. However, Tingyi Holding is 1.02 times more volatile than I Hwa Industrial Co. It trades about 0.19 of its potential returns per unit of risk. I Hwa Industrial Co is currently generating about -0.02 per unit of risk. If you would invest  2,045  in Tingyi Holding Corp on December 2, 2024 and sell it today you would earn a total of  455.00  from holding Tingyi Holding Corp or generate 22.25% return on investment over 90 days.

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

Tingyi Holding Corp  vs.  I Hwa Industrial Co

Tingyi Holding Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Tingyi Holding Corp are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat abnormal basic indicators, Tingyi Holding sustained solid returns over the last few months and may actually be approaching a breakup point.

I Hwa Industrial

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Tingyi Holding and I Hwa

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

The idea behind Tingyi Holding Corp and I Hwa Industrial Co 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.