Correlation Between Tradetool Auto and Cheng Fwa
Can any of the company-specific risk be diversified away by investing in both Tradetool Auto and Cheng Fwa 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 Tradetool Auto and Cheng Fwa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tradetool Auto Co and Cheng Fwa Industrial, you can compare the effects of market volatilities on Tradetool Auto and Cheng Fwa 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 Tradetool Auto with a short position of Cheng Fwa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tradetool Auto and Cheng Fwa.
Diversification Opportunities for Tradetool Auto and Cheng Fwa
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Tradetool and Cheng is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Tradetool Auto Co and Cheng Fwa Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cheng Fwa Industrial and Tradetool Auto 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 Tradetool Auto Co are associated (or correlated) with Cheng Fwa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cheng Fwa Industrial has no effect on the direction of Tradetool Auto i.e., Tradetool Auto and Cheng Fwa go up and down completely randomly.
Pair Corralation between Tradetool Auto and Cheng Fwa
Assuming the 90 days trading horizon Tradetool Auto Co is expected to under-perform the Cheng Fwa. But the stock apears to be less risky and, when comparing its historical volatility, Tradetool Auto Co is 1.62 times less risky than Cheng Fwa. The stock trades about -0.05 of its potential returns per unit of risk. The Cheng Fwa Industrial is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 3,815 in Cheng Fwa Industrial on September 3, 2024 and sell it today you would lose (535.00) from holding Cheng Fwa Industrial or give up 14.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tradetool Auto Co vs. Cheng Fwa Industrial
Performance |
| Timeline |
| Tradetool Auto |
| Cheng Fwa Industrial |
Tradetool Auto and Cheng Fwa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tradetool Auto and Cheng Fwa
The main advantage of trading using opposite Tradetool Auto and Cheng Fwa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tradetool Auto position performs unexpectedly, Cheng Fwa 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 Cheng Fwa will offset losses from the drop in Cheng Fwa's long position.| Tradetool Auto vs. Feng Hsin Steel | Tradetool Auto vs. AVer Information | Tradetool Auto vs. Mayer Steel Pipe | Tradetool Auto vs. Chung Hung Steel |
| Cheng Fwa vs. Nankang Rubber Tire | Cheng Fwa vs. Newretail Co | Cheng Fwa vs. Cheng Mei Materials | Cheng Fwa vs. Tradetool Auto 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |