Correlation Between TTET Union and Chailease Holding
Can any of the company-specific risk be diversified away by investing in both TTET Union and Chailease Holding 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 Chailease Holding 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 Chailease Holding Co, you can compare the effects of market volatilities on TTET Union and Chailease Holding 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 Chailease Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of TTET Union and Chailease Holding.
Diversification Opportunities for TTET Union and Chailease Holding
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between TTET and Chailease is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding TTET Union Corp and Chailease Holding Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chailease 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 Chailease Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chailease Holding has no effect on the direction of TTET Union i.e., TTET Union and Chailease Holding go up and down completely randomly.
Pair Corralation between TTET Union and Chailease Holding
Assuming the 90 days trading horizon TTET Union Corp is expected to generate 0.28 times more return on investment than Chailease Holding. However, TTET Union Corp is 3.56 times less risky than Chailease Holding. It trades about -0.4 of its potential returns per unit of risk. Chailease Holding Co is currently generating about -0.43 per unit of risk. If you would invest 15,500 in TTET Union Corp on August 24, 2024 and sell it today you would lose (950.00) from holding TTET Union Corp or give up 6.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
TTET Union Corp vs. Chailease Holding Co
Performance |
| Timeline |
| TTET Union Corp |
| Chailease Holding |
TTET Union and Chailease Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TTET Union and Chailease Holding
The main advantage of trading using opposite TTET Union and Chailease Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TTET Union position performs unexpectedly, Chailease Holding 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 Chailease Holding will offset losses from the drop in Chailease Holding's long position.| TTET Union vs. Charoen Pokphand Enterprise | TTET Union vs. Standard Foods Corp | TTET Union vs. Uni President Enterprises Corp | TTET Union vs. Great Wall Enterprise |
| Chailease Holding vs. Fubon Financial Holding | Chailease Holding vs. Cathay Financial Holding | Chailease Holding vs. ESUN 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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