Correlation Between Huang Hsiang and Tung Thih
Can any of the company-specific risk be diversified away by investing in both Huang Hsiang 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 Huang Hsiang and Tung Thih into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Huang Hsiang Construction and Tung Thih Electronic, you can compare the effects of market volatilities on Huang Hsiang 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 Huang Hsiang with a short position of Tung Thih. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huang Hsiang and Tung Thih.
Diversification Opportunities for Huang Hsiang and Tung Thih
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Huang and Tung is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Huang Hsiang Construction 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 Huang Hsiang 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 Huang Hsiang Construction 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 Huang Hsiang i.e., Huang Hsiang and Tung Thih go up and down completely randomly.
Pair Corralation between Huang Hsiang and Tung Thih
Assuming the 90 days trading horizon Huang Hsiang Construction is expected to generate 1.18 times more return on investment than Tung Thih. However, Huang Hsiang is 1.18 times more volatile than Tung Thih Electronic. It trades about 0.0 of its potential returns per unit of risk. Tung Thih Electronic is currently generating about -0.01 per unit of risk. If you would invest 6,680 in Huang Hsiang Construction on September 13, 2024 and sell it today you would lose (80.00) from holding Huang Hsiang Construction or give up 1.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Huang Hsiang Construction vs. Tung Thih Electronic
Performance |
| Timeline |
| Huang Hsiang Construction |
| Tung Thih Electronic |
Huang Hsiang and Tung Thih Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huang Hsiang and Tung Thih
The main advantage of trading using opposite Huang Hsiang and Tung Thih positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huang Hsiang 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.| Huang Hsiang vs. Chong Hong Construction | Huang Hsiang vs. Ruentex Development Co | Huang Hsiang vs. Symtek Automation Asia | Huang Hsiang vs. WiseChip Semiconductor |
| Tung Thih vs. E Lead Electronic Co | Tung Thih vs. Jentech Precision Industrial | Tung Thih vs. Turvo International Co | Tung Thih vs. Ruentex Development 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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