Correlation Between Song Ho and Thunder Tiger
Can any of the company-specific risk be diversified away by investing in both Song Ho and Thunder Tiger 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 Song Ho and Thunder Tiger into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Song Ho Industrial and Thunder Tiger Corp, you can compare the effects of market volatilities on Song Ho and Thunder Tiger 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 Song Ho with a short position of Thunder Tiger. Check out your portfolio center. Please also check ongoing floating volatility patterns of Song Ho and Thunder Tiger.
Diversification Opportunities for Song Ho and Thunder Tiger
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Song and Thunder is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Song Ho Industrial and Thunder Tiger Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thunder Tiger Corp and Song Ho 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 Song Ho Industrial are associated (or correlated) with Thunder Tiger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thunder Tiger Corp has no effect on the direction of Song Ho i.e., Song Ho and Thunder Tiger go up and down completely randomly.
Pair Corralation between Song Ho and Thunder Tiger
Assuming the 90 days trading horizon Song Ho Industrial is expected to generate 0.23 times more return on investment than Thunder Tiger. However, Song Ho Industrial is 4.3 times less risky than Thunder Tiger. It trades about -0.01 of its potential returns per unit of risk. Thunder Tiger Corp is currently generating about -0.01 per unit of risk. If you would invest 2,850 in Song Ho Industrial on September 12, 2024 and sell it today you would lose (100.00) from holding Song Ho Industrial or give up 3.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Song Ho Industrial vs. Thunder Tiger Corp
Performance |
| Timeline |
| Song Ho Industrial |
| Thunder Tiger Corp |
Song Ho and Thunder Tiger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Song Ho and Thunder Tiger
The main advantage of trading using opposite Song Ho and Thunder Tiger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Song Ho position performs unexpectedly, Thunder Tiger 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 Thunder Tiger will offset losses from the drop in Thunder Tiger's long position.| Song Ho vs. Tong Tai Machine Tool | Song Ho vs. Oriental Union Chemical | Song Ho vs. Ruentex Development Co | Song Ho vs. Symtek Automation Asia |
| Thunder Tiger vs. Feng Tay Enterprises | Thunder Tiger vs. Ruentex Development Co | Thunder Tiger vs. WiseChip Semiconductor | Thunder Tiger vs. Novatek Microelectronics Corp |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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