Correlation Between Turvo International and Greatek Electronics
Can any of the company-specific risk be diversified away by investing in both Turvo International and Greatek Electronics 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 Turvo International and Greatek Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Turvo International Co and Greatek Electronics, you can compare the effects of market volatilities on Turvo International and Greatek Electronics 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 Turvo International with a short position of Greatek Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Turvo International and Greatek Electronics.
Diversification Opportunities for Turvo International and Greatek Electronics
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Turvo and Greatek is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Turvo International Co and Greatek Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greatek Electronics and Turvo International 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 Turvo International Co are associated (or correlated) with Greatek Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greatek Electronics has no effect on the direction of Turvo International i.e., Turvo International and Greatek Electronics go up and down completely randomly.
Pair Corralation between Turvo International and Greatek Electronics
Assuming the 90 days trading horizon Turvo International Co is expected to generate 3.55 times more return on investment than Greatek Electronics. However, Turvo International is 3.55 times more volatile than Greatek Electronics. It trades about 0.12 of its potential returns per unit of risk. Greatek Electronics is currently generating about -0.05 per unit of risk. If you would invest 16,100 in Turvo International Co on August 31, 2024 and sell it today you would earn a total of 1,600 from holding Turvo International Co or generate 9.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Turvo International Co vs. Greatek Electronics
Performance |
| Timeline |
| Turvo International |
| Greatek Electronics |
Turvo International and Greatek Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Turvo International and Greatek Electronics
The main advantage of trading using opposite Turvo International and Greatek Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Turvo International position performs unexpectedly, Greatek Electronics 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 Greatek Electronics will offset losses from the drop in Greatek Electronics' long position.| Turvo International vs. Greatek Electronics | Turvo International vs. Elan Microelectronics Corp | Turvo International vs. Sigurd Microelectronics Corp | Turvo International vs. Hota Industrial Mfg |
| Greatek Electronics vs. United Microelectronics | Greatek Electronics vs. Winbond Electronics Corp | Greatek Electronics vs. Macronix International Co |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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