Correlation Between Tung Thih and Hsinjing Holding
Can any of the company-specific risk be diversified away by investing in both Tung Thih and Hsinjing Holding 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 Hsinjing Holding 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 Hsinjing Holding Co, you can compare the effects of market volatilities on Tung Thih and Hsinjing Holding 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 Hsinjing Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tung Thih and Hsinjing Holding.
Diversification Opportunities for Tung Thih and Hsinjing Holding
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Tung and Hsinjing is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Tung Thih Electronic and Hsinjing Holding Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hsinjing Holding 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 Hsinjing Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hsinjing Holding has no effect on the direction of Tung Thih i.e., Tung Thih and Hsinjing Holding go up and down completely randomly.
Pair Corralation between Tung Thih and Hsinjing Holding
Assuming the 90 days trading horizon Tung Thih Electronic is expected to generate 22.95 times more return on investment than Hsinjing Holding. However, Tung Thih is 22.95 times more volatile than Hsinjing Holding Co. It trades about 0.06 of its potential returns per unit of risk. Hsinjing Holding Co is currently generating about -0.01 per unit of risk. If you would invest 13,346 in Tung Thih Electronic on September 3, 2024 and sell it today you would lose (3,466) from holding Tung Thih Electronic or give up 25.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tung Thih Electronic vs. Hsinjing Holding Co
Performance |
| Timeline |
| Tung Thih Electronic |
| Hsinjing Holding |
Tung Thih and Hsinjing Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tung Thih and Hsinjing Holding
The main advantage of trading using opposite Tung Thih and Hsinjing Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tung Thih position performs unexpectedly, Hsinjing Holding 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 Hsinjing Holding will offset losses from the drop in Hsinjing Holding'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 |
| Hsinjing Holding vs. Motech Industries Co | Hsinjing Holding vs. Danen Technology Corp | Hsinjing Holding vs. Falcon Power Co |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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