Correlation Between TTET Union and IBF Financial
Can any of the company-specific risk be diversified away by investing in both TTET Union and IBF 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 IBF 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 IBF Financial Holdings, you can compare the effects of market volatilities on TTET Union and IBF 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 IBF Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of TTET Union and IBF Financial.
Diversification Opportunities for TTET Union and IBF Financial
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between TTET and IBF is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding TTET Union Corp and IBF Financial Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IBF Financial Holdings 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 IBF Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IBF Financial Holdings has no effect on the direction of TTET Union i.e., TTET Union and IBF Financial go up and down completely randomly.
Pair Corralation between TTET Union and IBF Financial
Assuming the 90 days trading horizon TTET Union Corp is expected to under-perform the IBF Financial. But the stock apears to be less risky and, when comparing its historical volatility, TTET Union Corp is 1.59 times less risky than IBF Financial. The stock trades about -0.26 of its potential returns per unit of risk. The IBF Financial Holdings is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,475 in IBF Financial Holdings on September 1, 2024 and sell it today you would earn a total of 5.00 from holding IBF Financial Holdings or generate 0.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TTET Union Corp vs. IBF Financial Holdings
Performance |
| Timeline |
| TTET Union Corp |
| IBF Financial Holdings |
TTET Union and IBF Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TTET Union and IBF Financial
The main advantage of trading using opposite TTET Union and IBF Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TTET Union position performs unexpectedly, IBF 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 IBF Financial will offset losses from the drop in IBF Financial's long position.| TTET Union vs. De Licacy Industrial | TTET Union vs. Wisher Industrial Co | TTET Union vs. Tainan Enterprises Co |
| IBF Financial vs. Silicon Power Computer | IBF Financial vs. Voltronic Power Technology | IBF Financial vs. Tai Tung Communication | IBF Financial vs. Asmedia Technology |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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