Correlation Between Hota Industrial and Tong Hsing
Can any of the company-specific risk be diversified away by investing in both Hota Industrial and Tong Hsing 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 Hota Industrial and Tong Hsing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hota Industrial Mfg and Tong Hsing Electronic, you can compare the effects of market volatilities on Hota Industrial and Tong Hsing 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 Hota Industrial with a short position of Tong Hsing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hota Industrial and Tong Hsing.
Diversification Opportunities for Hota Industrial and Tong Hsing
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Hota and Tong is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Hota Industrial Mfg and Tong Hsing Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tong Hsing Electronic and Hota Industrial 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 Hota Industrial Mfg are associated (or correlated) with Tong Hsing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tong Hsing Electronic has no effect on the direction of Hota Industrial i.e., Hota Industrial and Tong Hsing go up and down completely randomly.
Pair Corralation between Hota Industrial and Tong Hsing
Assuming the 90 days trading horizon Hota Industrial Mfg is expected to generate 0.95 times more return on investment than Tong Hsing. However, Hota Industrial Mfg is 1.06 times less risky than Tong Hsing. It trades about 0.0 of its potential returns per unit of risk. Tong Hsing Electronic is currently generating about -0.05 per unit of risk. If you would invest 7,290 in Hota Industrial Mfg on September 1, 2024 and sell it today you would lose (830.00) from holding Hota Industrial Mfg or give up 11.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.78% |
| Values | Daily Returns |
Hota Industrial Mfg vs. Tong Hsing Electronic
Performance |
| Timeline |
| Hota Industrial Mfg |
| Tong Hsing Electronic |
Hota Industrial and Tong Hsing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hota Industrial and Tong Hsing
The main advantage of trading using opposite Hota Industrial and Tong Hsing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hota Industrial position performs unexpectedly, Tong Hsing 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 Hsing will offset losses from the drop in Tong Hsing's long position.| Hota Industrial vs. Chaintech Technology Corp | Hota Industrial vs. AVerMedia Technologies | Hota Industrial vs. Avision | Hota Industrial vs. Clevo Co |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |