Correlation Between Dynamic Medical and Tung Ho
Can any of the company-specific risk be diversified away by investing in both Dynamic Medical and Tung Ho 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 Dynamic Medical and Tung Ho into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dynamic Medical Technologies and Tung Ho Steel, you can compare the effects of market volatilities on Dynamic Medical and Tung Ho 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 Dynamic Medical with a short position of Tung Ho. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dynamic Medical and Tung Ho.
Diversification Opportunities for Dynamic Medical and Tung Ho
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Dynamic and Tung is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Dynamic Medical Technologies and Tung Ho Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tung Ho Steel and Dynamic Medical 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 Dynamic Medical Technologies are associated (or correlated) with Tung Ho. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tung Ho Steel has no effect on the direction of Dynamic Medical i.e., Dynamic Medical and Tung Ho go up and down completely randomly.
Pair Corralation between Dynamic Medical and Tung Ho
Assuming the 90 days trading horizon Dynamic Medical Technologies is expected to generate 1.65 times more return on investment than Tung Ho. However, Dynamic Medical is 1.65 times more volatile than Tung Ho Steel. It trades about 0.07 of its potential returns per unit of risk. Tung Ho Steel is currently generating about -0.15 per unit of risk. If you would invest 8,950 in Dynamic Medical Technologies on September 1, 2024 and sell it today you would earn a total of 230.00 from holding Dynamic Medical Technologies or generate 2.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dynamic Medical Technologies vs. Tung Ho Steel
Performance |
| Timeline |
| Dynamic Medical Tech |
| Tung Ho Steel |
Dynamic Medical and Tung Ho Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dynamic Medical and Tung Ho
The main advantage of trading using opposite Dynamic Medical and Tung Ho positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dynamic Medical position performs unexpectedly, Tung Ho 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 Tung Ho will offset losses from the drop in Tung Ho's long position.| Dynamic Medical vs. Tung Ho Steel | Dynamic Medical vs. Standard Chemical Pharmaceutical | Dynamic Medical vs. Iron Force Industrial | Dynamic Medical vs. Hsin Kuang Steel |
| Tung Ho vs. Basso Industry Corp | Tung Ho vs. Chung Hsin Electric Machinery | Tung Ho vs. TYC Brother Industrial | Tung Ho vs. TECO Electric Machinery |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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