Correlation Between Tsang Yow and Chia Yi
Can any of the company-specific risk be diversified away by investing in both Tsang Yow and Chia Yi 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 Tsang Yow and Chia Yi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tsang Yow Industrial and Chia Yi Steel, you can compare the effects of market volatilities on Tsang Yow and Chia Yi 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 Tsang Yow with a short position of Chia Yi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tsang Yow and Chia Yi.
Diversification Opportunities for Tsang Yow and Chia Yi
Good diversification
The 3 months correlation between Tsang and Chia is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Tsang Yow Industrial and Chia Yi Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chia Yi Steel and Tsang Yow 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 Tsang Yow Industrial are associated (or correlated) with Chia Yi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chia Yi Steel has no effect on the direction of Tsang Yow i.e., Tsang Yow and Chia Yi go up and down completely randomly.
Pair Corralation between Tsang Yow and Chia Yi
Assuming the 90 days trading horizon Tsang Yow Industrial is expected to generate 0.85 times more return on investment than Chia Yi. However, Tsang Yow Industrial is 1.17 times less risky than Chia Yi. It trades about -0.01 of its potential returns per unit of risk. Chia Yi Steel is currently generating about -0.02 per unit of risk. If you would invest 3,215 in Tsang Yow Industrial on September 1, 2024 and sell it today you would lose (425.00) from holding Tsang Yow Industrial or give up 13.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tsang Yow Industrial vs. Chia Yi Steel
Performance |
| Timeline |
| Tsang Yow Industrial |
| Chia Yi Steel |
Tsang Yow and Chia Yi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tsang Yow and Chia Yi
The main advantage of trading using opposite Tsang Yow and Chia Yi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tsang Yow position performs unexpectedly, Chia Yi 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 Chia Yi will offset losses from the drop in Chia Yi's long position.| Tsang Yow vs. Hota Industrial Mfg | Tsang Yow vs. BizLink Holding | Tsang Yow vs. Cub Elecparts | Tsang Yow vs. Hu Lane Associate |
| Chia Yi vs. Yang Ming Marine | Chia Yi vs. Wan Hai Lines | Chia Yi vs. Hsin Kuang Steel | Chia Yi vs. Evergreen Marine 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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