Correlation Between Gloria Material and Tong Tai
Can any of the company-specific risk be diversified away by investing in both Gloria Material 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 Gloria Material and Tong Tai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gloria Material Technology and Tong Tai Machine Tool, you can compare the effects of market volatilities on Gloria Material 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 Gloria Material with a short position of Tong Tai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gloria Material and Tong Tai.
Diversification Opportunities for Gloria Material and Tong Tai
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gloria and Tong is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Gloria Material Technology 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 Gloria Material 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 Gloria Material Technology 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 Gloria Material i.e., Gloria Material and Tong Tai go up and down completely randomly.
Pair Corralation between Gloria Material and Tong Tai
Assuming the 90 days trading horizon Gloria Material Technology is expected to under-perform the Tong Tai. But the stock apears to be less risky and, when comparing its historical volatility, Gloria Material Technology is 2.77 times less risky than Tong Tai. The stock trades about -0.19 of its potential returns per unit of risk. The Tong Tai Machine Tool is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 3,230 in Tong Tai Machine Tool on September 13, 2024 and sell it today you would lose (75.00) from holding Tong Tai Machine Tool or give up 2.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gloria Material Technology vs. Tong Tai Machine Tool
Performance |
| Timeline |
| Gloria Material Tech |
| Tong Tai Machine |
Gloria Material and Tong Tai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gloria Material and Tong Tai
The main advantage of trading using opposite Gloria Material and Tong Tai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gloria Material 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.| Gloria Material vs. Thunder Tiger Corp | Gloria Material vs. Synmosa Biopharma | Gloria Material vs. Taiwan Glass Ind | Gloria Material vs. Tong Tai Machine Tool |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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