Correlation Between Tehmag Foods and Ching Feng
Can any of the company-specific risk be diversified away by investing in both Tehmag Foods and Ching Feng 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 Ching Feng into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tehmag Foods and Ching Feng Home, you can compare the effects of market volatilities on Tehmag Foods and Ching Feng 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 Ching Feng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tehmag Foods and Ching Feng.
Diversification Opportunities for Tehmag Foods and Ching Feng
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tehmag and Ching is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Tehmag Foods and Ching Feng Home in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ching Feng Home 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 Ching Feng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ching Feng Home has no effect on the direction of Tehmag Foods i.e., Tehmag Foods and Ching Feng go up and down completely randomly.
Pair Corralation between Tehmag Foods and Ching Feng
Assuming the 90 days trading horizon Tehmag Foods is expected to generate 0.41 times more return on investment than Ching Feng. However, Tehmag Foods is 2.45 times less risky than Ching Feng. It trades about 0.24 of its potential returns per unit of risk. Ching Feng Home is currently generating about -0.06 per unit of risk. If you would invest 30,900 in Tehmag Foods on October 24, 2024 and sell it today you would earn a total of 800.00 from holding Tehmag Foods or generate 2.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tehmag Foods vs. Ching Feng Home
Performance |
| Timeline |
| Tehmag Foods |
| Ching Feng Home |
Tehmag Foods and Ching Feng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tehmag Foods and Ching Feng
The main advantage of trading using opposite Tehmag Foods and Ching Feng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tehmag Foods position performs unexpectedly, Ching Feng 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 Ching Feng will offset losses from the drop in Ching Feng's long position.| Tehmag Foods vs. Wistron Information Technology | Tehmag Foods vs. Farglory FTZ Investment | Tehmag Foods vs. Quanta Storage | Tehmag Foods vs. Mitake Information |
| Ching Feng vs. Globe Union Industrial | Ching Feng vs. Taiwan Fu Hsing | Ching Feng vs. Taiwan Hon Chuan | Ching Feng vs. Feng Tay Enterprises |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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