Correlation Between Thermaltake Technology and Chernan Metal
Can any of the company-specific risk be diversified away by investing in both Thermaltake Technology and Chernan Metal 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 Chernan Metal 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 Chernan Metal Industrial, you can compare the effects of market volatilities on Thermaltake Technology and Chernan Metal 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 Chernan Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thermaltake Technology and Chernan Metal.
Diversification Opportunities for Thermaltake Technology and Chernan Metal
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Thermaltake and Chernan is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Thermaltake Technology Co and Chernan Metal Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chernan Metal Industrial 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 Chernan Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chernan Metal Industrial has no effect on the direction of Thermaltake Technology i.e., Thermaltake Technology and Chernan Metal go up and down completely randomly.
Pair Corralation between Thermaltake Technology and Chernan Metal
Assuming the 90 days trading horizon Thermaltake Technology Co is expected to generate 0.83 times more return on investment than Chernan Metal. However, Thermaltake Technology Co is 1.21 times less risky than Chernan Metal. It trades about 0.0 of its potential returns per unit of risk. Chernan Metal Industrial is currently generating about -0.12 per unit of risk. If you would invest 3,880 in Thermaltake Technology Co on August 24, 2024 and sell it today you would lose (10.00) from holding Thermaltake Technology Co or give up 0.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thermaltake Technology Co vs. Chernan Metal Industrial
Performance |
| Timeline |
| Thermaltake Technology |
| Chernan Metal Industrial |
Thermaltake Technology and Chernan Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thermaltake Technology and Chernan Metal
The main advantage of trading using opposite Thermaltake Technology and Chernan Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thermaltake Technology position performs unexpectedly, Chernan Metal 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 Chernan Metal will offset losses from the drop in Chernan Metal's long position.| Thermaltake Technology vs. Quanta Computer | Thermaltake Technology vs. Wiwynn Corp | Thermaltake Technology vs. Getac Technology Corp | Thermaltake Technology vs. InnoDisk |
| Chernan Metal vs. Baotek Industrial Materials | Chernan Metal vs. Tex Ray Industrial Co | Chernan Metal vs. Unique Optical Industrial | Chernan Metal vs. Shuang Bang Industrial |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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