Correlation Between Allied Industrial and Tsang Yow
Can any of the company-specific risk be diversified away by investing in both Allied Industrial and Tsang Yow 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 Allied Industrial and Tsang Yow into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Allied Industrial and Tsang Yow Industrial, you can compare the effects of market volatilities on Allied Industrial and Tsang Yow 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 Allied Industrial with a short position of Tsang Yow. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allied Industrial and Tsang Yow.
Diversification Opportunities for Allied Industrial and Tsang Yow
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Allied and Tsang is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Allied Industrial and Tsang Yow Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tsang Yow Industrial and Allied Industrial 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 Allied Industrial are associated (or correlated) with Tsang Yow. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tsang Yow Industrial has no effect on the direction of Allied Industrial i.e., Allied Industrial and Tsang Yow go up and down completely randomly.
Pair Corralation between Allied Industrial and Tsang Yow
Assuming the 90 days trading horizon Allied Industrial is expected to generate 6.57 times less return on investment than Tsang Yow. But when comparing it to its historical volatility, Allied Industrial is 1.65 times less risky than Tsang Yow. It trades about 0.01 of its potential returns per unit of risk. Tsang Yow Industrial is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 2,460 in Tsang Yow Industrial on September 4, 2024 and sell it today you would earn a total of 290.00 from holding Tsang Yow Industrial or generate 11.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Allied Industrial vs. Tsang Yow Industrial
Performance |
| Timeline |
| Allied Industrial |
| Tsang Yow Industrial |
Allied Industrial and Tsang Yow Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allied Industrial and Tsang Yow
The main advantage of trading using opposite Allied Industrial and Tsang Yow positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allied Industrial position performs unexpectedly, Tsang Yow 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 Tsang Yow will offset losses from the drop in Tsang Yow's long position.| Allied Industrial vs. Delta Electronics | Allied Industrial vs. China Steel Chemical | Allied Industrial vs. WiseChip Semiconductor | Allied Industrial vs. Novatek Microelectronics Corp |
| Tsang Yow vs. E Lead Electronic Co | Tsang Yow vs. Jentech Precision Industrial | Tsang Yow vs. Turvo International Co | Tsang Yow vs. Ruentex Development Co |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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