Correlation Between Tong Tai and Excelsior Medical
Can any of the company-specific risk be diversified away by investing in both Tong Tai and Excelsior Medical 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 Tong Tai and Excelsior Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tong Tai Machine Tool and Excelsior Medical Co, you can compare the effects of market volatilities on Tong Tai and Excelsior Medical 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 Tong Tai with a short position of Excelsior Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tong Tai and Excelsior Medical.
Diversification Opportunities for Tong Tai and Excelsior Medical
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Tong and Excelsior is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Tong Tai Machine Tool and Excelsior Medical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Excelsior Medical and Tong Tai 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 Tong Tai Machine Tool are associated (or correlated) with Excelsior Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Excelsior Medical has no effect on the direction of Tong Tai i.e., Tong Tai and Excelsior Medical go up and down completely randomly.
Pair Corralation between Tong Tai and Excelsior Medical
Assuming the 90 days trading horizon Tong Tai Machine Tool is expected to generate 11.15 times more return on investment than Excelsior Medical. However, Tong Tai is 11.15 times more volatile than Excelsior Medical Co. It trades about 0.07 of its potential returns per unit of risk. Excelsior Medical Co is currently generating about -0.05 per unit of risk. If you would invest 3,300 in Tong Tai Machine Tool on August 29, 2024 and sell it today you would earn a total of 130.00 from holding Tong Tai Machine Tool or generate 3.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tong Tai Machine Tool vs. Excelsior Medical Co
Performance |
| Timeline |
| Tong Tai Machine |
| Excelsior Medical |
Tong Tai and Excelsior Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tong Tai and Excelsior Medical
The main advantage of trading using opposite Tong Tai and Excelsior Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tong Tai position performs unexpectedly, Excelsior Medical 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 Excelsior Medical will offset losses from the drop in Excelsior Medical's long position.| Tong Tai vs. Sunny Friend Environmental | Tong Tai vs. TTET Union Corp | Tong Tai vs. ECOVE Environment Corp | Tong Tai vs. Yulon Finance Corp |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |