Correlation Between TMP Steel and Group Up
Can any of the company-specific risk be diversified away by investing in both TMP Steel and Group Up 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 TMP Steel and Group Up into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TMP Steel and Group Up Industrial, you can compare the effects of market volatilities on TMP Steel and Group Up 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 TMP Steel with a short position of Group Up. Check out your portfolio center. Please also check ongoing floating volatility patterns of TMP Steel and Group Up.
Diversification Opportunities for TMP Steel and Group Up
Poor diversification
The 3 months correlation between TMP and Group is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding TMP Steel and Group Up Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Group Up Industrial and TMP Steel 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 TMP Steel are associated (or correlated) with Group Up. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Group Up Industrial has no effect on the direction of TMP Steel i.e., TMP Steel and Group Up go up and down completely randomly.
Pair Corralation between TMP Steel and Group Up
Assuming the 90 days trading horizon TMP Steel is expected to generate 0.63 times more return on investment than Group Up. However, TMP Steel is 1.59 times less risky than Group Up. It trades about -0.15 of its potential returns per unit of risk. Group Up Industrial is currently generating about -0.14 per unit of risk. If you would invest 2,965 in TMP Steel on September 1, 2024 and sell it today you would lose (135.00) from holding TMP Steel or give up 4.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
TMP Steel vs. Group Up Industrial
Performance |
| Timeline |
| TMP Steel |
| Group Up Industrial |
TMP Steel and Group Up Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TMP Steel and Group Up
The main advantage of trading using opposite TMP Steel and Group Up positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TMP Steel position performs unexpectedly, Group Up 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 Group Up will offset losses from the drop in Group Up's long position.| TMP Steel vs. Sunspring Metal Corp | TMP Steel vs. Microelectronics Technology | TMP Steel vs. Sun Max Tech | TMP Steel vs. United Radiant Technology |
| Group Up vs. Wei Chih Steel | Group Up vs. Ligitek Electronics Co | Group Up vs. Ablerex Electronics Co | Group Up vs. TMP Steel |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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