Correlation Between Transcend Information and China Metal
Can any of the company-specific risk be diversified away by investing in both Transcend Information and China Metal 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 Transcend Information and China Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transcend Information and China Metal Products, you can compare the effects of market volatilities on Transcend Information and China Metal 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 Transcend Information with a short position of China Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transcend Information and China Metal.
Diversification Opportunities for Transcend Information and China Metal
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Transcend and China is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Transcend Information and China Metal Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Metal Products and Transcend Information 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 Transcend Information are associated (or correlated) with China Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Metal Products has no effect on the direction of Transcend Information i.e., Transcend Information and China Metal go up and down completely randomly.
Pair Corralation between Transcend Information and China Metal
Assuming the 90 days trading horizon Transcend Information is expected to generate 0.86 times more return on investment than China Metal. However, Transcend Information is 1.16 times less risky than China Metal. It trades about 0.05 of its potential returns per unit of risk. China Metal Products is currently generating about 0.0 per unit of risk. If you would invest 7,310 in Transcend Information on August 28, 2024 and sell it today you would earn a total of 2,050 from holding Transcend Information or generate 28.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Transcend Information vs. China Metal Products
Performance |
| Timeline |
| Transcend Information |
| China Metal Products |
Transcend Information and China Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transcend Information and China Metal
The main advantage of trading using opposite Transcend Information and China Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transcend Information position performs unexpectedly, China Metal 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 China Metal will offset losses from the drop in China Metal's long position.| Transcend Information vs. Nanya Technology Corp | Transcend Information vs. Powertech Technology | Transcend Information vs. Chicony Electronics Co | Transcend Information vs. Realtek Semiconductor Corp |
| China Metal vs. Basso Industry Corp | China Metal vs. Chung Hsin Electric Machinery | China Metal vs. TYC Brother Industrial | China Metal vs. TECO Electric Machinery |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |