Correlation Between Tung Thih and Goodway Machine
Can any of the company-specific risk be diversified away by investing in both Tung Thih and Goodway Machine 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 Tung Thih and Goodway Machine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tung Thih Electronic and Goodway Machine Corp, you can compare the effects of market volatilities on Tung Thih and Goodway Machine 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 Tung Thih with a short position of Goodway Machine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tung Thih and Goodway Machine.
Diversification Opportunities for Tung Thih and Goodway Machine
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tung and Goodway is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Tung Thih Electronic and Goodway Machine Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goodway Machine Corp and Tung Thih 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 Tung Thih Electronic are associated (or correlated) with Goodway Machine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goodway Machine Corp has no effect on the direction of Tung Thih i.e., Tung Thih and Goodway Machine go up and down completely randomly.
Pair Corralation between Tung Thih and Goodway Machine
Assuming the 90 days trading horizon Tung Thih Electronic is expected to generate 53.7 times more return on investment than Goodway Machine. However, Tung Thih is 53.7 times more volatile than Goodway Machine Corp. It trades about 0.06 of its potential returns per unit of risk. Goodway Machine Corp is currently generating about -0.03 per unit of risk. If you would invest 13,078 in Tung Thih Electronic on September 4, 2024 and sell it today you would lose (3,138) from holding Tung Thih Electronic or give up 23.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tung Thih Electronic vs. Goodway Machine Corp
Performance |
| Timeline |
| Tung Thih Electronic |
| Goodway Machine Corp |
Tung Thih and Goodway Machine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tung Thih and Goodway Machine
The main advantage of trading using opposite Tung Thih and Goodway Machine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tung Thih position performs unexpectedly, Goodway Machine 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 Goodway Machine will offset losses from the drop in Goodway Machine's long position.| Tung Thih vs. E Lead Electronic Co | Tung Thih vs. Jentech Precision Industrial | Tung Thih vs. Turvo International Co | Tung Thih vs. Ruentex Development Co |
| Goodway Machine vs. Universal Microelectronics Co | Goodway Machine vs. AVerMedia Technologies | Goodway Machine vs. Symtek Automation Asia | Goodway Machine vs. WiseChip Semiconductor |
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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