Correlation Between Ta Chen and Maanshan Iron
Can any of the company-specific risk be diversified away by investing in both Ta Chen and Maanshan 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 Ta Chen and Maanshan Iron into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ta Chen Stainless and Maanshan Iron Steel, you can compare the effects of market volatilities on Ta Chen and Maanshan 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 Ta Chen with a short position of Maanshan Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ta Chen and Maanshan Iron.
Diversification Opportunities for Ta Chen and Maanshan Iron
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 2027 and Maanshan is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Ta Chen Stainless and Maanshan Iron Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maanshan Iron Steel and Ta Chen 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 Chen Stainless are associated (or correlated) with Maanshan Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maanshan Iron Steel has no effect on the direction of Ta Chen i.e., Ta Chen and Maanshan Iron go up and down completely randomly.
Pair Corralation between Ta Chen and Maanshan Iron
Assuming the 90 days trading horizon Ta Chen Stainless is expected to under-perform the Maanshan Iron. But the stock apears to be less risky and, when comparing its historical volatility, Ta Chen Stainless is 3.06 times less risky than Maanshan Iron. The stock trades about -0.03 of its potential returns per unit of risk. The Maanshan Iron Steel is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 17.00 in Maanshan Iron Steel on August 24, 2024 and sell it today you would lose (2.00) from holding Maanshan Iron Steel or give up 11.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.59% |
| Values | Daily Returns |
Ta Chen Stainless vs. Maanshan Iron Steel
Performance |
| Timeline |
| Ta Chen Stainless |
| Maanshan Iron Steel |
Ta Chen and Maanshan Iron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ta Chen and Maanshan Iron
The main advantage of trading using opposite Ta Chen and Maanshan Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ta Chen position performs unexpectedly, Maanshan 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 Maanshan Iron will offset losses from the drop in Maanshan Iron's long position.| Ta Chen vs. Chung Hung Steel | Ta Chen vs. Tung Ho Steel | Ta Chen vs. Sheng Yu Steel | Ta Chen vs. Yulon Motor Co |
| Maanshan Iron vs. ArcelorMittal SA ADR | Maanshan Iron vs. Gerdau SA ADR | Maanshan Iron vs. POSCO Holdings | Maanshan Iron vs. HUMANA INC |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |