Correlation Between Tung Thih and China Times
Can any of the company-specific risk be diversified away by investing in both Tung Thih and China Times 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 China Times 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 China Times Publishing, you can compare the effects of market volatilities on Tung Thih and China Times 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 China Times. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tung Thih and China Times.
Diversification Opportunities for Tung Thih and China Times
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Tung and China is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Tung Thih Electronic and China Times Publishing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Times Publishing 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 China Times. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Times Publishing has no effect on the direction of Tung Thih i.e., Tung Thih and China Times go up and down completely randomly.
Pair Corralation between Tung Thih and China Times
Assuming the 90 days trading horizon Tung Thih Electronic is expected to under-perform the China Times. But the stock apears to be less risky and, when comparing its historical volatility, Tung Thih Electronic is 1.34 times less risky than China Times. The stock trades about -0.01 of its potential returns per unit of risk. The China Times Publishing is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,780 in China Times Publishing on September 13, 2024 and sell it today you would earn a total of 180.00 from holding China Times Publishing or generate 10.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tung Thih Electronic vs. China Times Publishing
Performance |
| Timeline |
| Tung Thih Electronic |
| China Times Publishing |
Tung Thih and China Times Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tung Thih and China Times
The main advantage of trading using opposite Tung Thih and China Times positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tung Thih position performs unexpectedly, China Times 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 China Times will offset losses from the drop in China Times' 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 |
| China Times vs. YuantaP shares Taiwan Top | China Times vs. YuantaP shares Taiwan Electronics | China Times vs. Fubon MSCI Taiwan | China Times vs. YuantaP shares Taiwan Mid Cap |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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