Correlation Between Tehmag Foods and C Tech
Can any of the company-specific risk be diversified away by investing in both Tehmag Foods and C Tech 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 Tehmag Foods and C Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tehmag Foods and C Tech United, you can compare the effects of market volatilities on Tehmag Foods and C Tech 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 Tehmag Foods with a short position of C Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tehmag Foods and C Tech.
Diversification Opportunities for Tehmag Foods and C Tech
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Tehmag and 3625 is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Tehmag Foods and C Tech United in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on C Tech United and Tehmag 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 Tehmag Foods are associated (or correlated) with C Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of C Tech United has no effect on the direction of Tehmag Foods i.e., Tehmag Foods and C Tech go up and down completely randomly.
Pair Corralation between Tehmag Foods and C Tech
Assuming the 90 days trading horizon Tehmag Foods is expected to generate 0.1 times more return on investment than C Tech. However, Tehmag Foods is 9.95 times less risky than C Tech. It trades about 0.13 of its potential returns per unit of risk. C Tech United is currently generating about -0.03 per unit of risk. If you would invest 31,200 in Tehmag Foods on October 20, 2024 and sell it today you would earn a total of 500.00 from holding Tehmag Foods or generate 1.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tehmag Foods vs. C Tech United
Performance |
| Timeline |
| Tehmag Foods |
| C Tech United |
Tehmag Foods and C Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tehmag Foods and C Tech
The main advantage of trading using opposite Tehmag Foods and C Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tehmag Foods position performs unexpectedly, C Tech 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 C Tech will offset losses from the drop in C Tech's long position.| Tehmag Foods vs. Tong Hwa Synthetic Fiber | Tehmag Foods vs. Hsinli Chemical Industrial | Tehmag Foods vs. Prime Oil Chemical | Tehmag Foods vs. Ho Tung Chemical |
| C Tech vs. ECOVE Environment Corp | C Tech vs. Oceanic Beverages Co | C Tech vs. Mayer Steel Pipe | C Tech vs. Nova 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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