Correlation Between TTET Union and Mega Financial
Can any of the company-specific risk be diversified away by investing in both TTET Union and Mega Financial 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 TTET Union and Mega Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TTET Union Corp and Mega Financial Holding, you can compare the effects of market volatilities on TTET Union and Mega Financial 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 TTET Union with a short position of Mega Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of TTET Union and Mega Financial.
Diversification Opportunities for TTET Union and Mega Financial
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between TTET and Mega is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding TTET Union Corp and Mega Financial Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mega Financial Holding and TTET Union 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 TTET Union Corp are associated (or correlated) with Mega Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mega Financial Holding has no effect on the direction of TTET Union i.e., TTET Union and Mega Financial go up and down completely randomly.
Pair Corralation between TTET Union and Mega Financial
Assuming the 90 days trading horizon TTET Union is expected to generate 1.07 times less return on investment than Mega Financial. But when comparing it to its historical volatility, TTET Union Corp is 1.26 times less risky than Mega Financial. It trades about 0.02 of its potential returns per unit of risk. Mega Financial Holding is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 3,930 in Mega Financial Holding on September 1, 2024 and sell it today you would earn a total of 45.00 from holding Mega Financial Holding or generate 1.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TTET Union Corp vs. Mega Financial Holding
Performance |
| Timeline |
| TTET Union Corp |
| Mega Financial Holding |
TTET Union and Mega Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TTET Union and Mega Financial
The main advantage of trading using opposite TTET Union and Mega Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TTET Union position performs unexpectedly, Mega Financial 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 Mega Financial will offset losses from the drop in Mega Financial's long position.| TTET Union vs. De Licacy Industrial | TTET Union vs. Wisher Industrial Co | TTET Union vs. Tainan Enterprises Co |
| Mega Financial vs. Central Reinsurance Corp | Mega Financial vs. Huaku Development Co | Mega Financial vs. Fubon Financial Holding |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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