Correlation Between Tung Ho and Century Iron
Can any of the company-specific risk be diversified away by investing in both Tung Ho and Century Iron 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 Tung Ho and Century Iron into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tung Ho Steel and Century Iron And, you can compare the effects of market volatilities on Tung Ho and Century Iron 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 Tung Ho with a short position of Century Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tung Ho and Century Iron.
Diversification Opportunities for Tung Ho and Century Iron
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tung and Century is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Tung Ho Steel and Century Iron And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Century Iron And and Tung Ho 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 Tung Ho Steel are associated (or correlated) with Century Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Century Iron And has no effect on the direction of Tung Ho i.e., Tung Ho and Century Iron go up and down completely randomly.
Pair Corralation between Tung Ho and Century Iron
Assuming the 90 days trading horizon Tung Ho Steel is expected to generate 0.49 times more return on investment than Century Iron. However, Tung Ho Steel is 2.02 times less risky than Century Iron. It trades about -0.15 of its potential returns per unit of risk. Century Iron And is currently generating about -0.29 per unit of risk. If you would invest 7,370 in Tung Ho Steel on September 1, 2024 and sell it today you would lose (320.00) from holding Tung Ho Steel or give up 4.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tung Ho Steel vs. Century Iron And
Performance |
| Timeline |
| Tung Ho Steel |
| Century Iron And |
Tung Ho and Century Iron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tung Ho and Century Iron
The main advantage of trading using opposite Tung Ho and Century Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tung Ho position performs unexpectedly, Century Iron 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 Century Iron will offset losses from the drop in Century Iron's long position.| Tung Ho vs. Basso Industry Corp | Tung Ho vs. Chung Hsin Electric Machinery | Tung Ho vs. TYC Brother Industrial | Tung Ho vs. TECO Electric Machinery |
| Century Iron vs. Basso Industry Corp | Century Iron vs. Chung Hsin Electric Machinery | Century Iron vs. TYC Brother Industrial | Century Iron vs. TECO Electric Machinery |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |