Correlation Between Nien Hsing and Tong Tai
Can any of the company-specific risk be diversified away by investing in both Nien Hsing and Tong Tai 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 Nien Hsing and Tong Tai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nien Hsing Textile and Tong Tai Machine Tool, you can compare the effects of market volatilities on Nien Hsing and Tong Tai 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 Nien Hsing with a short position of Tong Tai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nien Hsing and Tong Tai.
Diversification Opportunities for Nien Hsing and Tong Tai
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nien and Tong is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Nien Hsing Textile and Tong Tai Machine Tool in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tong Tai Machine and Nien Hsing 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 Nien Hsing Textile are associated (or correlated) with Tong Tai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tong Tai Machine has no effect on the direction of Nien Hsing i.e., Nien Hsing and Tong Tai go up and down completely randomly.
Pair Corralation between Nien Hsing and Tong Tai
Assuming the 90 days trading horizon Nien Hsing Textile is expected to under-perform the Tong Tai. But the stock apears to be less risky and, when comparing its historical volatility, Nien Hsing Textile is 3.1 times less risky than Tong Tai. The stock trades about 0.0 of its potential returns per unit of risk. The Tong Tai Machine Tool is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,460 in Tong Tai Machine Tool on September 2, 2024 and sell it today you would earn a total of 1,790 from holding Tong Tai Machine Tool or generate 122.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nien Hsing Textile vs. Tong Tai Machine Tool
Performance |
| Timeline |
| Nien Hsing Textile |
| Tong Tai Machine |
Nien Hsing and Tong Tai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nien Hsing and Tong Tai
The main advantage of trading using opposite Nien Hsing and Tong Tai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nien Hsing position performs unexpectedly, Tong Tai 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 Tong Tai will offset losses from the drop in Tong Tai's long position.| Nien Hsing vs. Chaintech Technology Corp | Nien Hsing vs. Avision | Nien Hsing vs. Clevo Co | Nien Hsing vs. Elitegroup Computer Systems |
| Tong Tai vs. Kaulin Mfg | Tong Tai vs. Nien Hsing Textile | Tong Tai vs. Awea Mechantronic Co | Tong Tai vs. Min Aik 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Stocks Directory Find actively traded stocks across global markets | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |