Correlation Between Nien Hsing and Depo Auto
Can any of the company-specific risk be diversified away by investing in both Nien Hsing and Depo Auto 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 Depo Auto 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 Depo Auto Parts, you can compare the effects of market volatilities on Nien Hsing and Depo Auto 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 Depo Auto. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nien Hsing and Depo Auto.
Diversification Opportunities for Nien Hsing and Depo Auto
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Nien and Depo is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Nien Hsing Textile and Depo Auto Parts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Depo Auto Parts 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 Depo Auto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Depo Auto Parts has no effect on the direction of Nien Hsing i.e., Nien Hsing and Depo Auto go up and down completely randomly.
Pair Corralation between Nien Hsing and Depo Auto
Assuming the 90 days trading horizon Nien Hsing Textile is expected to generate 0.35 times more return on investment than Depo Auto. However, Nien Hsing Textile is 2.87 times less risky than Depo Auto. It trades about -0.06 of its potential returns per unit of risk. Depo Auto Parts is currently generating about -0.03 per unit of risk. If you would invest 2,090 in Nien Hsing Textile on October 13, 2024 and sell it today you would lose (155.00) from holding Nien Hsing Textile or give up 7.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nien Hsing Textile vs. Depo Auto Parts
Performance |
| Timeline |
| Nien Hsing Textile |
| Depo Auto Parts |
Nien Hsing and Depo Auto Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nien Hsing and Depo Auto
The main advantage of trading using opposite Nien Hsing and Depo Auto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nien Hsing position performs unexpectedly, Depo Auto 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 Depo Auto will offset losses from the drop in Depo Auto's long position.| Nien Hsing vs. Ruentex Development Co | Nien Hsing vs. WiseChip Semiconductor | Nien Hsing vs. Leader Electronics | Nien Hsing vs. CTCI Corp |
| Depo Auto vs. Gordon Auto Body | Depo Auto vs. Nien Hsing Textile | Depo Auto vs. Sincere Navigation Corp | Depo Auto vs. Tong Tai Machine Tool |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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