Correlation Between Zhen Ding and Tainet Communication
Can any of the company-specific risk be diversified away by investing in both Zhen Ding and Tainet Communication 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 Zhen Ding and Tainet Communication into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zhen Ding Technology and Tainet Communication System, you can compare the effects of market volatilities on Zhen Ding and Tainet Communication 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 Zhen Ding with a short position of Tainet Communication. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhen Ding and Tainet Communication.
Diversification Opportunities for Zhen Ding and Tainet Communication
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Zhen and Tainet is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Zhen Ding Technology and Tainet Communication System in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tainet Communication and Zhen Ding 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 Zhen Ding Technology are associated (or correlated) with Tainet Communication. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tainet Communication has no effect on the direction of Zhen Ding i.e., Zhen Ding and Tainet Communication go up and down completely randomly.
Pair Corralation between Zhen Ding and Tainet Communication
Assuming the 90 days trading horizon Zhen Ding Technology is expected to under-perform the Tainet Communication. In addition to that, Zhen Ding is 1.16 times more volatile than Tainet Communication System. It trades about -0.15 of its total potential returns per unit of risk. Tainet Communication System is currently generating about 0.02 per unit of volatility. If you would invest 7,660 in Tainet Communication System on October 24, 2024 and sell it today you would earn a total of 40.00 from holding Tainet Communication System or generate 0.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhen Ding Technology vs. Tainet Communication System
Performance |
| Timeline |
| Zhen Ding Technology |
| Tainet Communication |
Zhen Ding and Tainet Communication Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhen Ding and Tainet Communication
The main advantage of trading using opposite Zhen Ding and Tainet Communication positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhen Ding position performs unexpectedly, Tainet Communication 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 Tainet Communication will offset losses from the drop in Tainet Communication's long position.| Zhen Ding vs. Unimicron Technology Corp | Zhen Ding vs. Flexium Interconnect | Zhen Ding vs. Catcher Technology Co | Zhen Ding vs. Pegatron Corp |
| Tainet Communication vs. Elite Material Co | Tainet Communication vs. Formosan Rubber Group | Tainet Communication vs. Daxin Materials Corp | Tainet Communication vs. Data International 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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