Correlation Between Tung Thih and WT Microelectronics
Can any of the company-specific risk be diversified away by investing in both Tung Thih and WT Microelectronics 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 WT Microelectronics 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 WT Microelectronics Co, you can compare the effects of market volatilities on Tung Thih and WT Microelectronics 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 WT Microelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tung Thih and WT Microelectronics.
Diversification Opportunities for Tung Thih and WT Microelectronics
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Tung and 3036A is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Tung Thih Electronic and WT Microelectronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WT Microelectronics 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 WT Microelectronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WT Microelectronics has no effect on the direction of Tung Thih i.e., Tung Thih and WT Microelectronics go up and down completely randomly.
Pair Corralation between Tung Thih and WT Microelectronics
Assuming the 90 days trading horizon Tung Thih Electronic is expected to generate 185.36 times more return on investment than WT Microelectronics. However, Tung Thih is 185.36 times more volatile than WT Microelectronics Co. It trades about 0.06 of its potential returns per unit of risk. WT Microelectronics Co is currently generating about 0.05 per unit of risk. If you would invest 13,181 in Tung Thih Electronic on November 5, 2024 and sell it today you would lose (4,711) from holding Tung Thih Electronic or give up 35.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tung Thih Electronic vs. WT Microelectronics Co
Performance |
| Timeline |
| Tung Thih Electronic |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| WT Microelectronics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Strong
Tung Thih and WT Microelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tung Thih and WT Microelectronics
The main advantage of trading using opposite Tung Thih and WT Microelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tung Thih position performs unexpectedly, WT Microelectronics 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 WT Microelectronics will offset losses from the drop in WT Microelectronics' long position.The idea behind Tung Thih Electronic and WT Microelectronics Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |