Correlation Between Hsinli Chemical and Tai Tung
Can any of the company-specific risk be diversified away by investing in both Hsinli Chemical and Tai Tung 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 Hsinli Chemical and Tai Tung into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hsinli Chemical Industrial and Tai Tung Communication, you can compare the effects of market volatilities on Hsinli Chemical and Tai Tung 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 Hsinli Chemical with a short position of Tai Tung. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hsinli Chemical and Tai Tung.
Diversification Opportunities for Hsinli Chemical and Tai Tung
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hsinli and Tai is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Hsinli Chemical Industrial and Tai Tung Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tai Tung Communication and Hsinli Chemical 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 Hsinli Chemical Industrial are associated (or correlated) with Tai Tung. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tai Tung Communication has no effect on the direction of Hsinli Chemical i.e., Hsinli Chemical and Tai Tung go up and down completely randomly.
Pair Corralation between Hsinli Chemical and Tai Tung
Assuming the 90 days trading horizon Hsinli Chemical Industrial is expected to generate 1.33 times more return on investment than Tai Tung. However, Hsinli Chemical is 1.33 times more volatile than Tai Tung Communication. It trades about -0.01 of its potential returns per unit of risk. Tai Tung Communication is currently generating about -0.31 per unit of risk. If you would invest 4,905 in Hsinli Chemical Industrial on October 22, 2024 and sell it today you would lose (30.00) from holding Hsinli Chemical Industrial or give up 0.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Hsinli Chemical Industrial vs. Tai Tung Communication
Performance |
| Timeline |
| Hsinli Chemical Indu |
| Tai Tung Communication |
Hsinli Chemical and Tai Tung Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hsinli Chemical and Tai Tung
The main advantage of trading using opposite Hsinli Chemical and Tai Tung positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hsinli Chemical position performs unexpectedly, Tai Tung 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 Tai Tung will offset losses from the drop in Tai Tung's long position.| Hsinli Chemical vs. Galaxy Software Services | Hsinli Chemical vs. International CSRC Investment | Hsinli Chemical vs. Sesoda Corp | Hsinli Chemical vs. Chief Telecom |
| Tai Tung vs. Zinwell | Tai Tung vs. Mercuries Life Insurance | Tai Tung vs. Darwin Precisions Corp | Tai Tung vs. Jinli Group Holdings |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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