Correlation Between Tung Thih and Huang Hsiang
Can any of the company-specific risk be diversified away by investing in both Tung Thih and Huang Hsiang 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 Huang Hsiang 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 Huang Hsiang Construction, you can compare the effects of market volatilities on Tung Thih and Huang Hsiang 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 Huang Hsiang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tung Thih and Huang Hsiang.
Diversification Opportunities for Tung Thih and Huang Hsiang
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tung and Huang is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Tung Thih Electronic and Huang Hsiang Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huang Hsiang Construction 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 Huang Hsiang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huang Hsiang Construction has no effect on the direction of Tung Thih i.e., Tung Thih and Huang Hsiang go up and down completely randomly.
Pair Corralation between Tung Thih and Huang Hsiang
Assuming the 90 days trading horizon Tung Thih Electronic is expected to generate 1.1 times more return on investment than Huang Hsiang. However, Tung Thih is 1.1 times more volatile than Huang Hsiang Construction. It trades about 0.09 of its potential returns per unit of risk. Huang Hsiang Construction is currently generating about 0.04 per unit of risk. If you would invest 8,340 in Tung Thih Electronic on September 13, 2024 and sell it today you would earn a total of 1,350 from holding Tung Thih Electronic or generate 16.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tung Thih Electronic vs. Huang Hsiang Construction
Performance |
| Timeline |
| Tung Thih Electronic |
| Huang Hsiang Construction |
Tung Thih and Huang Hsiang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tung Thih and Huang Hsiang
The main advantage of trading using opposite Tung Thih and Huang Hsiang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tung Thih position performs unexpectedly, Huang Hsiang 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 Huang Hsiang will offset losses from the drop in Huang Hsiang's long position.| Tung Thih vs. Hota Industrial Mfg | Tung Thih vs. BizLink Holding | Tung Thih vs. Cub Elecparts | Tung Thih vs. Hu Lane Associate |
| Huang Hsiang vs. Chong Hong Construction | Huang Hsiang vs. Ruentex Development Co | Huang Hsiang vs. Symtek Automation Asia | Huang Hsiang 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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