Correlation Between Tainan Spinning and Tang Eng
Can any of the company-specific risk be diversified away by investing in both Tainan Spinning and Tang Eng 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 Tainan Spinning and Tang Eng into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tainan Spinning Co and Tang Eng Iron, you can compare the effects of market volatilities on Tainan Spinning and Tang Eng 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 Tainan Spinning with a short position of Tang Eng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tainan Spinning and Tang Eng.
Diversification Opportunities for Tainan Spinning and Tang Eng
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tainan and Tang is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Tainan Spinning Co and Tang Eng Iron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tang Eng Iron and Tainan Spinning 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 Tainan Spinning Co are associated (or correlated) with Tang Eng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tang Eng Iron has no effect on the direction of Tainan Spinning i.e., Tainan Spinning and Tang Eng go up and down completely randomly.
Pair Corralation between Tainan Spinning and Tang Eng
Assuming the 90 days trading horizon Tainan Spinning Co is expected to generate 0.74 times more return on investment than Tang Eng. However, Tainan Spinning Co is 1.36 times less risky than Tang Eng. It trades about 0.0 of its potential returns per unit of risk. Tang Eng Iron is currently generating about -0.09 per unit of risk. If you would invest 1,510 in Tainan Spinning Co on September 13, 2024 and sell it today you would earn a total of 0.00 from holding Tainan Spinning Co or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tainan Spinning Co vs. Tang Eng Iron
Performance |
| Timeline |
| Tainan Spinning |
| Tang Eng Iron |
Tainan Spinning and Tang Eng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tainan Spinning and Tang Eng
The main advantage of trading using opposite Tainan Spinning and Tang Eng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tainan Spinning position performs unexpectedly, Tang Eng 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 Tang Eng will offset losses from the drop in Tang Eng's long position.| Tainan Spinning vs. Lealea Enterprise Co | Tainan Spinning vs. China Petrochemical Development | Tainan Spinning vs. Li Peng Enterprise | Tainan Spinning vs. Oriental Union Chemical |
| Tang Eng vs. Jia Jie Biomedical | Tang Eng vs. Mercuries Life Insurance | Tang Eng vs. TWOWAY Communications | Tang Eng vs. Dynamic Medical Technologies |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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