Correlation Between Thinking Electronic and Tung Thih
Can any of the company-specific risk be diversified away by investing in both Thinking Electronic and Tung Thih 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 Tung Thih 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 Tung Thih Electronic, you can compare the effects of market volatilities on Thinking Electronic and Tung Thih 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 Tung Thih. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thinking Electronic and Tung Thih.
Diversification Opportunities for Thinking Electronic and Tung Thih
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Thinking and Tung is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Thinking Electronic Industrial and Tung Thih Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tung Thih Electronic 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 Tung Thih. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tung Thih Electronic has no effect on the direction of Thinking Electronic i.e., Thinking Electronic and Tung Thih go up and down completely randomly.
Pair Corralation between Thinking Electronic and Tung Thih
Assuming the 90 days trading horizon Thinking Electronic is expected to generate 92.03 times less return on investment than Tung Thih. But when comparing it to its historical volatility, Thinking Electronic Industrial is 34.8 times less risky than Tung Thih. It trades about 0.02 of its potential returns per unit of risk. Tung Thih Electronic is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 13,181 in Tung Thih Electronic on November 5, 2024 and sell it today you would lose (4,711) from holding Tung Thih Electronic or give up 35.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thinking Electronic Industrial vs. Tung Thih Electronic
Performance |
| Timeline |
| Thinking Electronic |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Tung Thih Electronic |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Thinking Electronic and Tung Thih Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thinking Electronic and Tung Thih
The main advantage of trading using opposite Thinking Electronic and Tung Thih positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thinking Electronic position performs unexpectedly, Tung Thih 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 Thih will offset losses from the drop in Tung Thih's long position.The idea behind Thinking Electronic Industrial and Tung Thih Electronic 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.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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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