Correlation Between Emerging Display and Ton Yi
Can any of the company-specific risk be diversified away by investing in both Emerging Display and Ton Yi 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 Emerging Display and Ton Yi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emerging Display Technologies and Ton Yi Industrial, you can compare the effects of market volatilities on Emerging Display and Ton Yi 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 Emerging Display with a short position of Ton Yi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emerging Display and Ton Yi.
Diversification Opportunities for Emerging Display and Ton Yi
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Emerging and Ton is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Emerging Display Technologies and Ton Yi Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ton Yi Industrial and Emerging Display 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 Emerging Display Technologies are associated (or correlated) with Ton Yi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ton Yi Industrial has no effect on the direction of Emerging Display i.e., Emerging Display and Ton Yi go up and down completely randomly.
Pair Corralation between Emerging Display and Ton Yi
Assuming the 90 days trading horizon Emerging Display Technologies is expected to generate 1.6 times more return on investment than Ton Yi. However, Emerging Display is 1.6 times more volatile than Ton Yi Industrial. It trades about 0.03 of its potential returns per unit of risk. Ton Yi Industrial is currently generating about -0.01 per unit of risk. If you would invest 2,135 in Emerging Display Technologies on September 3, 2024 and sell it today you would earn a total of 555.00 from holding Emerging Display Technologies or generate 26.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Emerging Display Technologies vs. Ton Yi Industrial
Performance |
| Timeline |
| Emerging Display Tec |
| Ton Yi Industrial |
Emerging Display and Ton Yi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emerging Display and Ton Yi
The main advantage of trading using opposite Emerging Display and Ton Yi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emerging Display position performs unexpectedly, Ton Yi 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 Ton Yi will offset losses from the drop in Ton Yi's long position.| Emerging Display vs. Taiwan Semiconductor Manufacturing | Emerging Display vs. Yang Ming Marine | Emerging Display vs. ASE Industrial Holding | Emerging Display vs. AU Optronics |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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