Correlation Between Tung Thih and Yuan High
Can any of the company-specific risk be diversified away by investing in both Tung Thih and Yuan High 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 Yuan High 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 Yuan High Tech Development, you can compare the effects of market volatilities on Tung Thih and Yuan High 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 Yuan High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tung Thih and Yuan High.
Diversification Opportunities for Tung Thih and Yuan High
Very good diversification
The 3 months correlation between Tung and Yuan is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Tung Thih Electronic and Yuan High Tech Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yuan High Tech 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 Yuan High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yuan High Tech has no effect on the direction of Tung Thih i.e., Tung Thih and Yuan High go up and down completely randomly.
Pair Corralation between Tung Thih and Yuan High
Assuming the 90 days trading horizon Tung Thih is expected to generate 1.21 times less return on investment than Yuan High. But when comparing it to its historical volatility, Tung Thih Electronic is 3.86 times less risky than Yuan High. It trades about 0.35 of its potential returns per unit of risk. Yuan High Tech Development is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 19,200 in Yuan High Tech Development on November 28, 2024 and sell it today you would earn a total of 1,250 from holding Yuan High Tech Development or generate 6.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
Tung Thih Electronic vs. Yuan High Tech Development
Performance |
| Timeline |
| Tung Thih Electronic |
| Yuan High Tech |
Tung Thih and Yuan High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tung Thih and Yuan High
The main advantage of trading using opposite Tung Thih and Yuan High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tung Thih position performs unexpectedly, Yuan High 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 Yuan High will offset losses from the drop in Yuan High's long position.| Tung Thih vs. Hota Industrial Mfg | Tung Thih vs. Cub Elecparts | Tung Thih vs. Yulon Nissan Motor | Tung Thih vs. Tong Yang Industry |
| Yuan High vs. Simplo Technology Co | Yuan High vs. Asmedia Technology | Yuan High vs. AVer Information | Yuan High vs. Jetway Information 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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