Correlation Between Hiwin Mikrosystem and Tong Tai
Can any of the company-specific risk be diversified away by investing in both Hiwin Mikrosystem and Tong Tai 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 Hiwin Mikrosystem and Tong Tai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hiwin Mikrosystem Corp and Tong Tai Machine Tool, you can compare the effects of market volatilities on Hiwin Mikrosystem and Tong Tai 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 Hiwin Mikrosystem with a short position of Tong Tai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hiwin Mikrosystem and Tong Tai.
Diversification Opportunities for Hiwin Mikrosystem and Tong Tai
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hiwin and Tong is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Hiwin Mikrosystem Corp and Tong Tai Machine Tool in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tong Tai Machine and Hiwin Mikrosystem 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 Hiwin Mikrosystem Corp are associated (or correlated) with Tong Tai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tong Tai Machine has no effect on the direction of Hiwin Mikrosystem i.e., Hiwin Mikrosystem and Tong Tai go up and down completely randomly.
Pair Corralation between Hiwin Mikrosystem and Tong Tai
Assuming the 90 days trading horizon Hiwin Mikrosystem is expected to generate 1.54 times less return on investment than Tong Tai. But when comparing it to its historical volatility, Hiwin Mikrosystem Corp is 1.13 times less risky than Tong Tai. It trades about 0.05 of its potential returns per unit of risk. Tong Tai Machine Tool is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,460 in Tong Tai Machine Tool on September 2, 2024 and sell it today you would earn a total of 1,790 from holding Tong Tai Machine Tool or generate 122.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hiwin Mikrosystem Corp vs. Tong Tai Machine Tool
Performance |
| Timeline |
| Hiwin Mikrosystem Corp |
| Tong Tai Machine |
Hiwin Mikrosystem and Tong Tai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hiwin Mikrosystem and Tong Tai
The main advantage of trading using opposite Hiwin Mikrosystem and Tong Tai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hiwin Mikrosystem position performs unexpectedly, Tong Tai 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 Tong Tai will offset losses from the drop in Tong Tai's long position.| Hiwin Mikrosystem vs. Hiwin Technologies Corp | Hiwin Mikrosystem vs. Kung Long Batteries | Hiwin Mikrosystem vs. Airtac International Group | Hiwin Mikrosystem vs. Fortune Electric Co |
| Tong Tai vs. Kaulin Mfg | Tong Tai vs. Nien Hsing Textile | Tong Tai vs. Awea Mechantronic Co | Tong Tai vs. Min Aik Technology |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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