Correlation Between Camellia Metal and Tainet Communication
Can any of the company-specific risk be diversified away by investing in both Camellia Metal and Tainet Communication 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 Camellia Metal and Tainet Communication into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Camellia Metal Co and Tainet Communication System, you can compare the effects of market volatilities on Camellia Metal and Tainet Communication 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 Camellia Metal with a short position of Tainet Communication. Check out your portfolio center. Please also check ongoing floating volatility patterns of Camellia Metal and Tainet Communication.
Diversification Opportunities for Camellia Metal and Tainet Communication
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Camellia and Tainet is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Camellia Metal Co and Tainet Communication System in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tainet Communication and Camellia Metal 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 Camellia Metal Co are associated (or correlated) with Tainet Communication. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tainet Communication has no effect on the direction of Camellia Metal i.e., Camellia Metal and Tainet Communication go up and down completely randomly.
Pair Corralation between Camellia Metal and Tainet Communication
Assuming the 90 days trading horizon Camellia Metal Co is expected to under-perform the Tainet Communication. But the stock apears to be less risky and, when comparing its historical volatility, Camellia Metal Co is 1.99 times less risky than Tainet Communication. The stock trades about -0.02 of its potential returns per unit of risk. The Tainet Communication System is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 5,100 in Tainet Communication System on November 1, 2024 and sell it today you would earn a total of 2,700 from holding Tainet Communication System or generate 52.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Camellia Metal Co vs. Tainet Communication System
Performance |
| Timeline |
| Camellia Metal |
| Tainet Communication |
Camellia Metal and Tainet Communication Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Camellia Metal and Tainet Communication
The main advantage of trading using opposite Camellia Metal and Tainet Communication positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Camellia Metal position performs unexpectedly, Tainet Communication 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 Tainet Communication will offset losses from the drop in Tainet Communication's long position.| Camellia Metal vs. Zhen Ding Technology | Camellia Metal vs. Genovate Biotechnology Co | Camellia Metal vs. Asmedia Technology | Camellia Metal vs. Fubon Taiwan Technology |
| Tainet Communication vs. Thinking Electronic Industrial | Tainet Communication vs. SuperAlloy Industrial Co, | Tainet Communication vs. Genovate Biotechnology Co | Tainet Communication vs. PChome Online |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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