Correlation Between Coxon Precise and Ton Yi
Can any of the company-specific risk be diversified away by investing in both Coxon Precise and Ton Yi 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 Coxon Precise and Ton Yi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coxon Precise Industrial and Ton Yi Industrial, you can compare the effects of market volatilities on Coxon Precise and Ton Yi 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 Coxon Precise with a short position of Ton Yi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coxon Precise and Ton Yi.
Diversification Opportunities for Coxon Precise and Ton Yi
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Coxon and Ton is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Coxon Precise Industrial and Ton Yi Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ton Yi Industrial and Coxon Precise 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 Coxon Precise Industrial are associated (or correlated) with Ton Yi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ton Yi Industrial has no effect on the direction of Coxon Precise i.e., Coxon Precise and Ton Yi go up and down completely randomly.
Pair Corralation between Coxon Precise and Ton Yi
Assuming the 90 days trading horizon Coxon Precise Industrial is expected to generate 1.89 times more return on investment than Ton Yi. However, Coxon Precise is 1.89 times more volatile than Ton Yi Industrial. It trades about 0.05 of its potential returns per unit of risk. Ton Yi Industrial is currently generating about -0.01 per unit of risk. If you would invest 1,230 in Coxon Precise Industrial on September 3, 2024 and sell it today you would earn a total of 615.00 from holding Coxon Precise Industrial or generate 50.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Coxon Precise Industrial vs. Ton Yi Industrial
Performance |
| Timeline |
| Coxon Precise Industrial |
| Ton Yi Industrial |
Coxon Precise and Ton Yi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coxon Precise and Ton Yi
The main advantage of trading using opposite Coxon Precise and Ton Yi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coxon Precise position performs unexpectedly, Ton Yi 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 Ton Yi will offset losses from the drop in Ton Yi's long position.| Coxon Precise vs. Taiwan Semiconductor Manufacturing | Coxon Precise vs. Yang Ming Marine | Coxon Precise vs. ASE Industrial Holding | Coxon Precise vs. AU Optronics |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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