Correlation Between Parade Technologies and TUL
Can any of the company-specific risk be diversified away by investing in both Parade Technologies and TUL 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 Parade Technologies and TUL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Parade Technologies and TUL Corporation, you can compare the effects of market volatilities on Parade Technologies and TUL 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 Parade Technologies with a short position of TUL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Parade Technologies and TUL.
Diversification Opportunities for Parade Technologies and TUL
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Parade and TUL is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Parade Technologies and TUL Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TUL Corporation and Parade Technologies 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 Parade Technologies are associated (or correlated) with TUL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TUL Corporation has no effect on the direction of Parade Technologies i.e., Parade Technologies and TUL go up and down completely randomly.
Pair Corralation between Parade Technologies and TUL
Assuming the 90 days trading horizon Parade Technologies is expected to under-perform the TUL. But the stock apears to be less risky and, when comparing its historical volatility, Parade Technologies is 1.54 times less risky than TUL. The stock trades about -0.08 of its potential returns per unit of risk. The TUL Corporation is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 7,620 in TUL Corporation on August 31, 2024 and sell it today you would lose (320.00) from holding TUL Corporation or give up 4.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Parade Technologies vs. TUL Corp.
Performance |
| Timeline |
| Parade Technologies |
| TUL Corporation |
Parade Technologies and TUL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Parade Technologies and TUL
The main advantage of trading using opposite Parade Technologies and TUL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Parade Technologies position performs unexpectedly, TUL 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 TUL will offset losses from the drop in TUL's long position.| Parade Technologies vs. Aspeed Technology | Parade Technologies vs. Silergy Corp | Parade Technologies vs. Novatek Microelectronics Corp | Parade Technologies vs. WIN Semiconductors |
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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 Stocks Directory module to find actively traded stocks across global markets.
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