Correlation Between Trade Van and Tainet Communication
Can any of the company-specific risk be diversified away by investing in both Trade Van 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 Trade Van and Tainet Communication into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trade Van Information Services and Tainet Communication System, you can compare the effects of market volatilities on Trade Van 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 Trade Van with a short position of Tainet Communication. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trade Van and Tainet Communication.
Diversification Opportunities for Trade Van and Tainet Communication
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Trade and Tainet is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Trade Van Information Services and Tainet Communication System in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tainet Communication and Trade Van 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 Trade Van Information Services 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 Trade Van i.e., Trade Van and Tainet Communication go up and down completely randomly.
Pair Corralation between Trade Van and Tainet Communication
Assuming the 90 days trading horizon Trade Van Information Services is expected to generate 0.39 times more return on investment than Tainet Communication. However, Trade Van Information Services is 2.53 times less risky than Tainet Communication. It trades about 0.08 of its potential returns per unit of risk. Tainet Communication System is currently generating about -0.06 per unit of risk. If you would invest 7,400 in Trade Van Information Services on August 29, 2024 and sell it today you would earn a total of 740.00 from holding Trade Van Information Services or generate 10.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Trade Van Information Services vs. Tainet Communication System
Performance |
| Timeline |
| Trade Van Information |
| Tainet Communication |
Trade Van and Tainet Communication Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trade Van and Tainet Communication
The main advantage of trading using opposite Trade Van and Tainet Communication positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trade Van 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.| Trade Van vs. Sitronix Technology Corp | Trade Van vs. Elan Microelectronics Corp | Trade Van vs. Global Unichip Corp | Trade Van vs. Holtek Semiconductor |
| Tainet Communication vs. Accton Technology Corp | Tainet Communication vs. Wistron NeWeb Corp | Tainet Communication vs. Arcadyan Technology Corp | Tainet Communication vs. Sercomm 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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