Correlation Between Tang Eng and Cameo Communications
Can any of the company-specific risk be diversified away by investing in both Tang Eng and Cameo Communications 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 Tang Eng and Cameo Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tang Eng Iron and Cameo Communications, you can compare the effects of market volatilities on Tang Eng and Cameo Communications 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 Tang Eng with a short position of Cameo Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tang Eng and Cameo Communications.
Diversification Opportunities for Tang Eng and Cameo Communications
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Tang and Cameo is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Tang Eng Iron and Cameo Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cameo Communications and Tang Eng 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 Tang Eng Iron are associated (or correlated) with Cameo Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cameo Communications has no effect on the direction of Tang Eng i.e., Tang Eng and Cameo Communications go up and down completely randomly.
Pair Corralation between Tang Eng and Cameo Communications
Assuming the 90 days trading horizon Tang Eng Iron is expected to under-perform the Cameo Communications. But the stock apears to be less risky and, when comparing its historical volatility, Tang Eng Iron is 3.02 times less risky than Cameo Communications. The stock trades about -0.02 of its potential returns per unit of risk. The Cameo Communications is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 995.00 in Cameo Communications on September 14, 2024 and sell it today you would earn a total of 205.00 from holding Cameo Communications or generate 20.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tang Eng Iron vs. Cameo Communications
Performance |
| Timeline |
| Tang Eng Iron |
| Cameo Communications |
Tang Eng and Cameo Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tang Eng and Cameo Communications
The main advantage of trading using opposite Tang Eng and Cameo Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tang Eng position performs unexpectedly, Cameo Communications 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 Cameo Communications will offset losses from the drop in Cameo Communications' long position.| Tang Eng vs. SS Healthcare Holding | Tang Eng vs. Dadi Early Childhood Education | Tang Eng vs. Weltrend Semiconductor | Tang Eng vs. Mospec Semiconductor Corp |
| Cameo Communications vs. Gemtek Technology Co | Cameo Communications vs. CyberTAN Technology | Cameo Communications vs. Alpha Networks | Cameo Communications vs. D Link 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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