Correlation Between Clevo and Tung Ho
Can any of the company-specific risk be diversified away by investing in both Clevo and Tung Ho 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 Clevo and Tung Ho into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clevo Co and Tung Ho Textile, you can compare the effects of market volatilities on Clevo and Tung Ho 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 Clevo with a short position of Tung Ho. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clevo and Tung Ho.
Diversification Opportunities for Clevo and Tung Ho
Good diversification
The 3 months correlation between Clevo and Tung is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Clevo Co and Tung Ho Textile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tung Ho Textile and Clevo 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 Clevo Co are associated (or correlated) with Tung Ho. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tung Ho Textile has no effect on the direction of Clevo i.e., Clevo and Tung Ho go up and down completely randomly.
Pair Corralation between Clevo and Tung Ho
Assuming the 90 days trading horizon Clevo is expected to generate 1.04 times less return on investment than Tung Ho. In addition to that, Clevo is 1.56 times more volatile than Tung Ho Textile. It trades about 0.02 of its total potential returns per unit of risk. Tung Ho Textile is currently generating about 0.03 per unit of volatility. If you would invest 2,355 in Tung Ho Textile on September 1, 2024 and sell it today you would earn a total of 20.00 from holding Tung Ho Textile or generate 0.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clevo Co vs. Tung Ho Textile
Performance |
| Timeline |
| Clevo |
| Tung Ho Textile |
Clevo and Tung Ho Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clevo and Tung Ho
The main advantage of trading using opposite Clevo and Tung Ho positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clevo position performs unexpectedly, Tung Ho 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 Tung Ho will offset losses from the drop in Tung Ho's long position.The idea behind Clevo Co and Tung Ho Textile pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Tung Ho vs. Chaintech Technology Corp | Tung Ho vs. AVerMedia Technologies | Tung Ho vs. Avision | Tung Ho vs. Clevo 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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