Correlation Between Tainet Communication and Great Computer
Can any of the company-specific risk be diversified away by investing in both Tainet Communication and Great Computer 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 Tainet Communication and Great Computer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tainet Communication System and Great Computer, you can compare the effects of market volatilities on Tainet Communication and Great Computer 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 Tainet Communication with a short position of Great Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tainet Communication and Great Computer.
Diversification Opportunities for Tainet Communication and Great Computer
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Tainet and Great is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Tainet Communication System and Great Computer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great Computer and Tainet Communication 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 Tainet Communication System are associated (or correlated) with Great Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great Computer has no effect on the direction of Tainet Communication i.e., Tainet Communication and Great Computer go up and down completely randomly.
Pair Corralation between Tainet Communication and Great Computer
Assuming the 90 days trading horizon Tainet Communication System is expected to generate 0.38 times more return on investment than Great Computer. However, Tainet Communication System is 2.63 times less risky than Great Computer. It trades about 0.01 of its potential returns per unit of risk. Great Computer is currently generating about -0.21 per unit of risk. If you would invest 7,800 in Tainet Communication System on October 28, 2024 and sell it today you would earn a total of 0.00 from holding Tainet Communication System or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tainet Communication System vs. Great Computer
Performance |
| Timeline |
| Tainet Communication |
| Great Computer |
Tainet Communication and Great Computer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tainet Communication and Great Computer
The main advantage of trading using opposite Tainet Communication and Great Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tainet Communication position performs unexpectedly, Great Computer 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 Great Computer will offset losses from the drop in Great Computer's long position.| Tainet Communication vs. Golden Biotechnology | Tainet Communication vs. ADLINK Technology | Tainet Communication vs. United Radiant Technology | Tainet Communication vs. Univacco Technology |
| Great Computer vs. Asmedia Technology | Great Computer vs. Holiday Entertainment Co | Great Computer vs. Eastern Media International | Great Computer vs. Softstar Entertainment |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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