Correlation Between Tung Thih and Baotek Industrial
Can any of the company-specific risk be diversified away by investing in both Tung Thih and Baotek Industrial 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 Baotek Industrial 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 Baotek Industrial Materials, you can compare the effects of market volatilities on Tung Thih and Baotek Industrial 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 Baotek Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tung Thih and Baotek Industrial.
Diversification Opportunities for Tung Thih and Baotek Industrial
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Tung and Baotek is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Tung Thih Electronic and Baotek Industrial Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baotek Industrial 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 Baotek Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baotek Industrial has no effect on the direction of Tung Thih i.e., Tung Thih and Baotek Industrial go up and down completely randomly.
Pair Corralation between Tung Thih and Baotek Industrial
Assuming the 90 days trading horizon Tung Thih Electronic is expected to under-perform the Baotek Industrial. In addition to that, Tung Thih is 1.08 times more volatile than Baotek Industrial Materials. It trades about -0.21 of its total potential returns per unit of risk. Baotek Industrial Materials is currently generating about -0.22 per unit of volatility. If you would invest 3,900 in Baotek Industrial Materials on January 16, 2025 and sell it today you would lose (870.00) from holding Baotek Industrial Materials or give up 22.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tung Thih Electronic vs. Baotek Industrial Materials
Performance |
| Timeline |
| Tung Thih Electronic |
| Baotek Industrial |
Tung Thih and Baotek Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tung Thih and Baotek Industrial
The main advantage of trading using opposite Tung Thih and Baotek Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tung Thih position performs unexpectedly, Baotek Industrial 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 Baotek Industrial will offset losses from the drop in Baotek Industrial's long position.| Tung Thih vs. Hota Industrial Mfg | Tung Thih vs. BizLink Holding | Tung Thih vs. WIN Semiconductors | Tung Thih vs. Ruentex Development Co |
| Baotek Industrial vs. Far Eastern New | Baotek Industrial vs. Eclat Textile Co | Baotek Industrial vs. Ruentex Industries | Baotek Industrial vs. Formosa Taffeta 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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