Correlation Between Tung Thih and Strong H
Can any of the company-specific risk be diversified away by investing in both Tung Thih and Strong H 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 Strong H 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 Strong H Machinery, you can compare the effects of market volatilities on Tung Thih and Strong H 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 Strong H. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tung Thih and Strong H.
Diversification Opportunities for Tung Thih and Strong H
Very good diversification
The 3 months correlation between Tung and Strong is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Tung Thih Electronic and Strong H Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strong H Machinery 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 Strong H. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strong H Machinery has no effect on the direction of Tung Thih i.e., Tung Thih and Strong H go up and down completely randomly.
Pair Corralation between Tung Thih and Strong H
Assuming the 90 days trading horizon Tung Thih Electronic is expected to under-perform the Strong H. In addition to that, Tung Thih is 2.2 times more volatile than Strong H Machinery. It trades about -0.26 of its total potential returns per unit of risk. Strong H Machinery is currently generating about -0.28 per unit of volatility. If you would invest 3,570 in Strong H Machinery on October 21, 2024 and sell it today you would lose (160.00) from holding Strong H Machinery or give up 4.48% 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. Strong H Machinery
Performance |
| Timeline |
| Tung Thih Electronic |
| Strong H Machinery |
Tung Thih and Strong H Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tung Thih and Strong H
The main advantage of trading using opposite Tung Thih and Strong H positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tung Thih position performs unexpectedly, Strong H 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 Strong H will offset losses from the drop in Strong H'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 |
| Strong H vs. Globaltek Fabrication Co | Strong H vs. TBI Motion Technology | Strong H vs. Tong Tai Machine Tool | Strong H vs. Drewloong Precision |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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