Correlation Between TECO Electric and Yeong Guan
Can any of the company-specific risk be diversified away by investing in both TECO Electric and Yeong Guan 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 TECO Electric and Yeong Guan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TECO Electric Machinery and Yeong Guan Energy, you can compare the effects of market volatilities on TECO Electric and Yeong Guan 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 TECO Electric with a short position of Yeong Guan. Check out your portfolio center. Please also check ongoing floating volatility patterns of TECO Electric and Yeong Guan.
Diversification Opportunities for TECO Electric and Yeong Guan
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between TECO and Yeong is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding TECO Electric Machinery and Yeong Guan Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yeong Guan Energy and TECO Electric 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 TECO Electric Machinery are associated (or correlated) with Yeong Guan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yeong Guan Energy has no effect on the direction of TECO Electric i.e., TECO Electric and Yeong Guan go up and down completely randomly.
Pair Corralation between TECO Electric and Yeong Guan
Assuming the 90 days trading horizon TECO Electric Machinery is expected to generate 0.71 times more return on investment than Yeong Guan. However, TECO Electric Machinery is 1.41 times less risky than Yeong Guan. It trades about 0.11 of its potential returns per unit of risk. Yeong Guan Energy is currently generating about 0.07 per unit of risk. If you would invest 4,990 in TECO Electric Machinery on August 28, 2024 and sell it today you would earn a total of 150.00 from holding TECO Electric Machinery or generate 3.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TECO Electric Machinery vs. Yeong Guan Energy
Performance |
| Timeline |
| TECO Electric Machinery |
| Yeong Guan Energy |
TECO Electric and Yeong Guan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TECO Electric and Yeong Guan
The main advantage of trading using opposite TECO Electric and Yeong Guan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TECO Electric position performs unexpectedly, Yeong Guan 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 Yeong Guan will offset losses from the drop in Yeong Guan's long position.| TECO Electric vs. Walsin Lihwa Corp | TECO Electric vs. Far Eastern New | TECO Electric vs. Nan Ya Plastics | TECO Electric vs. Taiwan Cement Corp |
| Yeong Guan vs. TECO Electric Machinery | Yeong Guan vs. Swancor Holding Co | Yeong Guan vs. Airtac International Group | Yeong Guan vs. Grape King Bio |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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