Correlation Between Yang Ming and Tong Tai
Can any of the company-specific risk be diversified away by investing in both Yang Ming and Tong Tai 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 Yang Ming and Tong Tai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yang Ming Marine and Tong Tai Machine Tool, you can compare the effects of market volatilities on Yang Ming and Tong Tai 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 Yang Ming with a short position of Tong Tai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yang Ming and Tong Tai.
Diversification Opportunities for Yang Ming and Tong Tai
Excellent diversification
The 3 months correlation between Yang and Tong is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Yang Ming Marine and Tong Tai Machine Tool in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tong Tai Machine and Yang Ming 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 Yang Ming Marine are associated (or correlated) with Tong Tai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tong Tai Machine has no effect on the direction of Yang Ming i.e., Yang Ming and Tong Tai go up and down completely randomly.
Pair Corralation between Yang Ming and Tong Tai
Assuming the 90 days trading horizon Yang Ming is expected to generate 1.2 times less return on investment than Tong Tai. But when comparing it to its historical volatility, Yang Ming Marine is 1.22 times less risky than Tong Tai. It trades about 0.08 of its potential returns per unit of risk. Tong Tai Machine Tool is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,860 in Tong Tai Machine Tool on September 14, 2024 and sell it today you would earn a total of 1,300 from holding Tong Tai Machine Tool or generate 69.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yang Ming Marine vs. Tong Tai Machine Tool
Performance |
| Timeline |
| Yang Ming Marine |
| Tong Tai Machine |
Yang Ming and Tong Tai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yang Ming and Tong Tai
The main advantage of trading using opposite Yang Ming and Tong Tai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yang Ming position performs unexpectedly, Tong Tai 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 Tong Tai will offset losses from the drop in Tong Tai's long position.| Yang Ming vs. Wan Hai Lines | Yang Ming vs. U Ming Marine Transport | Yang Ming vs. Taiwan Navigation Co | Yang Ming vs. China Airlines |
| Tong Tai vs. Kaulin Mfg | Tong Tai vs. Nien Hsing Textile | Tong Tai vs. Awea Mechantronic Co | Tong Tai vs. Min Aik Technology |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |