Correlation Between Tehmag Foods and Professional Computer
Can any of the company-specific risk be diversified away by investing in both Tehmag Foods and Professional 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 Professional 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 Professional Computer Technology, you can compare the effects of market volatilities on Tehmag Foods and Professional 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 Professional Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tehmag Foods and Professional Computer.
Diversification Opportunities for Tehmag Foods and Professional Computer
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Tehmag and Professional is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Tehmag Foods and Professional Computer Technolo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Professional 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 Professional Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Professional Computer has no effect on the direction of Tehmag Foods i.e., Tehmag Foods and Professional Computer go up and down completely randomly.
Pair Corralation between Tehmag Foods and Professional Computer
Assuming the 90 days trading horizon Tehmag Foods is expected to generate 0.23 times more return on investment than Professional Computer. However, Tehmag Foods is 4.3 times less risky than Professional Computer. It trades about 0.16 of its potential returns per unit of risk. Professional Computer Technology is currently generating about -0.06 per unit of risk. If you would invest 30,200 in Tehmag Foods on September 14, 2024 and sell it today you would earn a total of 400.00 from holding Tehmag Foods or generate 1.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tehmag Foods vs. Professional Computer Technolo
Performance |
| Timeline |
| Tehmag Foods |
| Professional Computer |
Tehmag Foods and Professional Computer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tehmag Foods and Professional Computer
The main advantage of trading using opposite Tehmag Foods and Professional Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tehmag Foods position performs unexpectedly, Professional 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 Professional Computer will offset losses from the drop in Professional Computer's long position.| Tehmag Foods vs. Dadi Early Childhood Education | Tehmag Foods vs. Chung Lien Transportation | Tehmag Foods vs. Chi Hua Fitness | Tehmag Foods vs. SS Healthcare Holding |
| Professional Computer vs. Tehmag Foods | Professional Computer vs. Orient Semiconductor Electronics | Professional Computer vs. Power Wind Health | Professional Computer vs. C Media Electronics |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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