Correlation Between Powertech Industrial and Ton Yi
Can any of the company-specific risk be diversified away by investing in both Powertech Industrial 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 Powertech Industrial and Ton Yi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Powertech Industrial Co and Ton Yi Industrial, you can compare the effects of market volatilities on Powertech Industrial 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 Powertech Industrial with a short position of Ton Yi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Powertech Industrial and Ton Yi.
Diversification Opportunities for Powertech Industrial and Ton Yi
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Powertech and Ton is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Powertech Industrial Co 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 Powertech Industrial 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 Powertech Industrial Co 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 Powertech Industrial i.e., Powertech Industrial and Ton Yi go up and down completely randomly.
Pair Corralation between Powertech Industrial and Ton Yi
Assuming the 90 days trading horizon Powertech Industrial Co is expected to generate 1.55 times more return on investment than Ton Yi. However, Powertech Industrial is 1.55 times more volatile than Ton Yi Industrial. It trades about 0.2 of its potential returns per unit of risk. Ton Yi Industrial is currently generating about -0.11 per unit of risk. If you would invest 2,755 in Powertech Industrial Co on September 1, 2024 and sell it today you would earn a total of 330.00 from holding Powertech Industrial Co or generate 11.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Powertech Industrial Co vs. Ton Yi Industrial
Performance |
| Timeline |
| Powertech Industrial |
| Ton Yi Industrial |
Powertech Industrial and Ton Yi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Powertech Industrial and Ton Yi
The main advantage of trading using opposite Powertech Industrial and Ton Yi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Powertech Industrial 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.| Powertech Industrial vs. BES Engineering Co | Powertech Industrial vs. Continental Holdings Corp | Powertech Industrial vs. Kee Tai Properties | Powertech Industrial vs. Hung Sheng Construction |
| Ton Yi vs. Far Eastern Department | Ton Yi vs. Chang Hwa Commercial | Ton Yi vs. Zinwell | Ton Yi vs. Evergreen International Storage |
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 Correlations module to find global opportunities by holding instruments from different markets.
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