Correlation Between Thermaltake Technology and Yageo Corp
Can any of the company-specific risk be diversified away by investing in both Thermaltake Technology and Yageo Corp 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 Thermaltake Technology and Yageo Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thermaltake Technology Co and Yageo Corp, you can compare the effects of market volatilities on Thermaltake Technology and Yageo Corp 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 Thermaltake Technology with a short position of Yageo Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thermaltake Technology and Yageo Corp.
Diversification Opportunities for Thermaltake Technology and Yageo Corp
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Thermaltake and Yageo is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Thermaltake Technology Co and Yageo Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yageo Corp and Thermaltake Technology 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 Thermaltake Technology Co are associated (or correlated) with Yageo Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yageo Corp has no effect on the direction of Thermaltake Technology i.e., Thermaltake Technology and Yageo Corp go up and down completely randomly.
Pair Corralation between Thermaltake Technology and Yageo Corp
Assuming the 90 days trading horizon Thermaltake Technology Co is expected to under-perform the Yageo Corp. But the stock apears to be less risky and, when comparing its historical volatility, Thermaltake Technology Co is 1.39 times less risky than Yageo Corp. The stock trades about -0.17 of its potential returns per unit of risk. The Yageo Corp is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 53,500 in Yageo Corp on October 9, 2024 and sell it today you would earn a total of 3,400 from holding Yageo Corp or generate 6.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thermaltake Technology Co vs. Yageo Corp
Performance |
| Timeline |
| Thermaltake Technology |
| Yageo Corp |
Thermaltake Technology and Yageo Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thermaltake Technology and Yageo Corp
The main advantage of trading using opposite Thermaltake Technology and Yageo Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thermaltake Technology position performs unexpectedly, Yageo Corp 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 Yageo Corp will offset losses from the drop in Yageo Corp's long position.| Thermaltake Technology vs. Qisda Corp | Thermaltake Technology vs. Quanta Computer | Thermaltake Technology vs. Coretronic | Thermaltake Technology vs. Wistron Corp |
| Yageo Corp vs. Silicon Power Computer | Yageo Corp vs. Jinan Acetate Chemical | Yageo Corp vs. Tong Hwa Synthetic Fiber | Yageo Corp vs. Johnson Chemical Pharmaceutical |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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