Correlation Between Thye Ming and SuperAlloy Industrial

Can any of the company-specific risk be diversified away by investing in both Thye Ming and SuperAlloy Industrial 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 Thye Ming and SuperAlloy Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Thye Ming and SuperAlloy Industrial

0.3

Correlation Coefficient

Thye Ming  SuperAlloy Industrial

Weak diversification

The 3 months correlation between Thye and SuperAlloy is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Thye Ming Industrial and SuperAlloy Industrial Co, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SuperAlloy Industrial Co, and Thye Ming 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 Thye Ming Industrial are associated (or correlated) with SuperAlloy Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SuperAlloy Industrial Co, has no effect on the direction of Thye Ming i.e., Thye Ming and SuperAlloy Industrial go up and down completely randomly.

Pair Corralation between Thye Ming and SuperAlloy Industrial

Assuming the 90 days trading horizon Thye Ming is expected to generate 1.13 times less return on investment than SuperAlloy Industrial. But when comparing it to its historical volatility, Thye Ming Industrial is 1.37 times less risky than SuperAlloy Industrial. It trades about 0.0 of its potential returns per unit of risk. SuperAlloy Industrial Co, is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  6,142  in SuperAlloy Industrial Co, on October 11, 2024 and sell it today you would lose (342.00) from holding SuperAlloy Industrial Co, or give up 5.57% of portfolio value over 90 days.

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

Thye Ming Industrial  vs.  SuperAlloy Industrial Co,

Thye Ming Industrial

Risk-Adjusted Performance

0 of 100

Very Weak

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

SuperAlloy Industrial Co,

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SuperAlloy Industrial Co, has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, SuperAlloy Industrial 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 Thye Ming and SuperAlloy Industrial

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

The idea behind Thye Ming Industrial and SuperAlloy 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.