Correlation Between Thinking Electronic and Holy Stone
Can any of the company-specific risk be diversified away by investing in both Thinking Electronic and Holy Stone 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 Thinking Electronic and Holy Stone into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thinking Electronic Industrial and Holy Stone Enterprise, you can compare the effects of market volatilities on Thinking Electronic and Holy Stone 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 Thinking Electronic with a short position of Holy Stone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thinking Electronic and Holy Stone.
Diversification Opportunities for Thinking Electronic and Holy Stone
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Thinking and Holy is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Thinking Electronic Industrial and Holy Stone Enterprise in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Holy Stone Enterprise and Thinking Electronic 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 Thinking Electronic Industrial are associated (or correlated) with Holy Stone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Holy Stone Enterprise has no effect on the direction of Thinking Electronic i.e., Thinking Electronic and Holy Stone go up and down completely randomly.
Pair Corralation between Thinking Electronic and Holy Stone
Assuming the 90 days trading horizon Thinking Electronic Industrial is expected to generate 4.01 times more return on investment than Holy Stone. However, Thinking Electronic is 4.01 times more volatile than Holy Stone Enterprise. It trades about 0.16 of its potential returns per unit of risk. Holy Stone Enterprise is currently generating about 0.05 per unit of risk. If you would invest 15,500 in Thinking Electronic Industrial on October 24, 2024 and sell it today you would earn a total of 950.00 from holding Thinking Electronic Industrial or generate 6.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thinking Electronic Industrial vs. Holy Stone Enterprise
Performance |
| Timeline |
| Thinking Electronic |
| Holy Stone Enterprise |
Thinking Electronic and Holy Stone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thinking Electronic and Holy Stone
The main advantage of trading using opposite Thinking Electronic and Holy Stone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thinking Electronic position performs unexpectedly, Holy Stone 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 Holy Stone will offset losses from the drop in Holy Stone's long position.| Thinking Electronic vs. Polytronics Technology Corp | Thinking Electronic vs. Greatek Electronics | Thinking Electronic vs. Elite Material Co | Thinking Electronic vs. Sunonwealth Electric Machine |
| Holy Stone vs. Walsin Technology Corp | Holy Stone vs. Yageo Corp | Holy Stone vs. Tripod Technology Corp | Holy Stone vs. Asia Optical 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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