Correlation Between Tung Thih and Ardentec
Can any of the company-specific risk be diversified away by investing in both Tung Thih and Ardentec 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 Ardentec 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 Ardentec, you can compare the effects of market volatilities on Tung Thih and Ardentec 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 Ardentec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tung Thih and Ardentec.
Diversification Opportunities for Tung Thih and Ardentec
Pay attention - limited upside
The 3 months correlation between Tung and Ardentec is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Tung Thih Electronic and Ardentec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ardentec 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 Ardentec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ardentec has no effect on the direction of Tung Thih i.e., Tung Thih and Ardentec go up and down completely randomly.
Pair Corralation between Tung Thih and Ardentec
Assuming the 90 days trading horizon Tung Thih Electronic is expected to under-perform the Ardentec. In addition to that, Tung Thih is 2.08 times more volatile than Ardentec. It trades about -0.08 of its total potential returns per unit of risk. Ardentec is currently generating about -0.11 per unit of volatility. If you would invest 5,660 in Ardentec on September 12, 2024 and sell it today you would lose (210.00) from holding Ardentec or give up 3.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tung Thih Electronic vs. Ardentec
Performance |
| Timeline |
| Tung Thih Electronic |
| Ardentec |
Tung Thih and Ardentec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tung Thih and Ardentec
The main advantage of trading using opposite Tung Thih and Ardentec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tung Thih position performs unexpectedly, Ardentec 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 Ardentec will offset losses from the drop in Ardentec'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 |
| Ardentec vs. Tang Eng Iron | Ardentec vs. Information Technology Total | Ardentec vs. Evergreen International Storage | Ardentec vs. AVer Information |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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