Correlation Between Roo Hsing and TOPBI International
Can any of the company-specific risk be diversified away by investing in both Roo Hsing and TOPBI International 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 Roo Hsing and TOPBI International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Roo Hsing Co and TOPBI International Holdings, you can compare the effects of market volatilities on Roo Hsing and TOPBI International 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 Roo Hsing with a short position of TOPBI International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Roo Hsing and TOPBI International.
Diversification Opportunities for Roo Hsing and TOPBI International
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Roo and TOPBI is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Roo Hsing Co and TOPBI International Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TOPBI International and Roo Hsing 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 Roo Hsing Co are associated (or correlated) with TOPBI International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TOPBI International has no effect on the direction of Roo Hsing i.e., Roo Hsing and TOPBI International go up and down completely randomly.
Pair Corralation between Roo Hsing and TOPBI International
Assuming the 90 days trading horizon Roo Hsing is expected to generate 2.25 times less return on investment than TOPBI International. But when comparing it to its historical volatility, Roo Hsing Co is 1.99 times less risky than TOPBI International. It trades about 0.2 of its potential returns per unit of risk. TOPBI International Holdings is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 1,170 in TOPBI International Holdings on August 31, 2024 and sell it today you would earn a total of 200.00 from holding TOPBI International Holdings or generate 17.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Roo Hsing Co vs. TOPBI International Holdings
Performance |
| Timeline |
| Roo Hsing |
| TOPBI International |
Roo Hsing and TOPBI International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Roo Hsing and TOPBI International
The main advantage of trading using opposite Roo Hsing and TOPBI International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Roo Hsing position performs unexpectedly, TOPBI International 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 TOPBI International will offset losses from the drop in TOPBI International's long position.| Roo Hsing vs. Chaintech Technology Corp | Roo Hsing vs. AVerMedia Technologies | Roo Hsing vs. Avision | Roo Hsing vs. Clevo Co |
| TOPBI International vs. Ruentex Industries | TOPBI International vs. Grand Pacific Petrochemical | TOPBI International vs. Formosa International Hotels | TOPBI International 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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