Correlation Between Tehmag Foods and Sunfar Computer
Can any of the company-specific risk be diversified away by investing in both Tehmag Foods and Sunfar Computer 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 Sunfar Computer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tehmag Foods and Sunfar Computer Co, you can compare the effects of market volatilities on Tehmag Foods and Sunfar Computer 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 Sunfar Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tehmag Foods and Sunfar Computer.
Diversification Opportunities for Tehmag Foods and Sunfar Computer
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tehmag and Sunfar is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Tehmag Foods and Sunfar Computer Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunfar Computer 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 Sunfar Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunfar Computer has no effect on the direction of Tehmag Foods i.e., Tehmag Foods and Sunfar Computer go up and down completely randomly.
Pair Corralation between Tehmag Foods and Sunfar Computer
Assuming the 90 days trading horizon Tehmag Foods is expected to generate 0.87 times more return on investment than Sunfar Computer. However, Tehmag Foods is 1.15 times less risky than Sunfar Computer. It trades about -0.02 of its potential returns per unit of risk. Sunfar Computer Co is currently generating about -0.08 per unit of risk. If you would invest 31,300 in Tehmag Foods on January 18, 2025 and sell it today you would lose (1,400) from holding Tehmag Foods or give up 4.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tehmag Foods vs. Sunfar Computer Co
Performance |
| Timeline |
| Tehmag Foods |
| Sunfar Computer |
Tehmag Foods and Sunfar Computer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tehmag Foods and Sunfar Computer
The main advantage of trading using opposite Tehmag Foods and Sunfar Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tehmag Foods position performs unexpectedly, Sunfar Computer 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 Sunfar Computer will offset losses from the drop in Sunfar Computer's long position.| 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 |
| Sunfar Computer vs. Space Shuttle Hi Tech | Sunfar Computer vs. Emerging Display Technologies | Sunfar Computer vs. Mercuries Data Systems | Sunfar Computer vs. Cameo Communications |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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