Correlation Between Hunya Foods and Tehmag Foods
Can any of the company-specific risk be diversified away by investing in both Hunya Foods and Tehmag Foods 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 Hunya Foods and Tehmag Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hunya Foods Co and Tehmag Foods, you can compare the effects of market volatilities on Hunya Foods and Tehmag Foods 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 Hunya Foods with a short position of Tehmag Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hunya Foods and Tehmag Foods.
Diversification Opportunities for Hunya Foods and Tehmag Foods
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hunya and Tehmag is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Hunya Foods Co and Tehmag Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tehmag Foods and Hunya Foods 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 Hunya Foods Co are associated (or correlated) with Tehmag Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tehmag Foods has no effect on the direction of Hunya Foods i.e., Hunya Foods and Tehmag Foods go up and down completely randomly.
Pair Corralation between Hunya Foods and Tehmag Foods
Assuming the 90 days trading horizon Hunya Foods is expected to generate 2.3 times less return on investment than Tehmag Foods. In addition to that, Hunya Foods is 1.84 times more volatile than Tehmag Foods. It trades about 0.02 of its total potential returns per unit of risk. Tehmag Foods is currently generating about 0.08 per unit of volatility. If you would invest 23,863 in Tehmag Foods on August 27, 2024 and sell it today you would earn a total of 6,587 from holding Tehmag Foods or generate 27.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hunya Foods Co vs. Tehmag Foods
Performance |
| Timeline |
| Hunya Foods |
| Tehmag Foods |
Hunya Foods and Tehmag Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hunya Foods and Tehmag Foods
The main advantage of trading using opposite Hunya Foods and Tehmag Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hunya Foods position performs unexpectedly, Tehmag Foods 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 Tehmag Foods will offset losses from the drop in Tehmag Foods' long position.| Hunya Foods vs. Lian Hwa Foods | Hunya Foods vs. Uni President Enterprises Corp | Hunya Foods vs. Taiwan Cement Corp | Hunya Foods vs. Ruentex Development Co |
| Tehmag Foods vs. Uni President Enterprises Corp | Tehmag Foods vs. Tingyi Holding Corp | Tehmag Foods vs. Lien Hwa Industrial | Tehmag Foods vs. Great Wall Enterprise |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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