Correlation Between Advanced Ceramic and Tung Ho
Can any of the company-specific risk be diversified away by investing in both Advanced Ceramic and Tung Ho 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 Advanced Ceramic and Tung Ho into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advanced Ceramic X and Tung Ho Steel, you can compare the effects of market volatilities on Advanced Ceramic and Tung Ho 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 Advanced Ceramic with a short position of Tung Ho. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Ceramic and Tung Ho.
Diversification Opportunities for Advanced Ceramic and Tung Ho
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Advanced and Tung is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Ceramic X and Tung Ho Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tung Ho Steel and Advanced Ceramic 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 Advanced Ceramic X are associated (or correlated) with Tung Ho. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tung Ho Steel has no effect on the direction of Advanced Ceramic i.e., Advanced Ceramic and Tung Ho go up and down completely randomly.
Pair Corralation between Advanced Ceramic and Tung Ho
Assuming the 90 days trading horizon Advanced Ceramic X is expected to under-perform the Tung Ho. In addition to that, Advanced Ceramic is 1.39 times more volatile than Tung Ho Steel. It trades about -0.36 of its total potential returns per unit of risk. Tung Ho Steel is currently generating about -0.07 per unit of volatility. If you would invest 6,930 in Tung Ho Steel on October 24, 2024 and sell it today you would lose (140.00) from holding Tung Ho Steel or give up 2.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Advanced Ceramic X vs. Tung Ho Steel
Performance |
| Timeline |
| Advanced Ceramic X |
| Tung Ho Steel |
Advanced Ceramic and Tung Ho Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advanced Ceramic and Tung Ho
The main advantage of trading using opposite Advanced Ceramic and Tung Ho positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Ceramic position performs unexpectedly, Tung Ho 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 Ho will offset losses from the drop in Tung Ho's long position.| Advanced Ceramic vs. Tung Ho Steel | Advanced Ceramic vs. Wei Chih Steel | Advanced Ceramic vs. Century Iron And | Advanced Ceramic vs. Kindom Construction Corp |
| Tung Ho vs. China Steel Corp | Tung Ho vs. Feng Hsin Steel | Tung Ho vs. Ta Chen Stainless | Tung Ho vs. Chung Hung Steel |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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