Correlation Between Ta Yih and Kinpo Electronics
Can any of the company-specific risk be diversified away by investing in both Ta Yih and Kinpo Electronics 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 Ta Yih and Kinpo Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ta Yih Industrial and Kinpo Electronics, you can compare the effects of market volatilities on Ta Yih and Kinpo Electronics 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 Ta Yih with a short position of Kinpo Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ta Yih and Kinpo Electronics.
Diversification Opportunities for Ta Yih and Kinpo Electronics
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 1521 and Kinpo is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Ta Yih Industrial and Kinpo Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinpo Electronics and Ta Yih 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 Ta Yih Industrial are associated (or correlated) with Kinpo Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinpo Electronics has no effect on the direction of Ta Yih i.e., Ta Yih and Kinpo Electronics go up and down completely randomly.
Pair Corralation between Ta Yih and Kinpo Electronics
Assuming the 90 days trading horizon Ta Yih Industrial is expected to under-perform the Kinpo Electronics. But the stock apears to be less risky and, when comparing its historical volatility, Ta Yih Industrial is 2.16 times less risky than Kinpo Electronics. The stock trades about -0.38 of its potential returns per unit of risk. The Kinpo Electronics is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 2,540 in Kinpo Electronics on October 26, 2024 and sell it today you would lose (40.00) from holding Kinpo Electronics or give up 1.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ta Yih Industrial vs. Kinpo Electronics
Performance |
| Timeline |
| Ta Yih Industrial |
| Kinpo Electronics |
Ta Yih and Kinpo Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ta Yih and Kinpo Electronics
The main advantage of trading using opposite Ta Yih and Kinpo Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ta Yih position performs unexpectedly, Kinpo Electronics 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 Kinpo Electronics will offset losses from the drop in Kinpo Electronics' long position.| Ta Yih vs. TYC Brother Industrial | Ta Yih vs. Basso Industry Corp | Ta Yih vs. Hota Industrial Mfg | Ta Yih vs. Tong Yang Industry |
| Kinpo Electronics vs. Tong Yang Industry | Kinpo Electronics vs. Ta Yih Industrial | Kinpo Electronics vs. Basso Industry Corp | Kinpo Electronics vs. China Motor Corp |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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