Correlation Between Tong Hsing and Chroma ATE
Can any of the company-specific risk be diversified away by investing in both Tong Hsing and Chroma ATE 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 Tong Hsing and Chroma ATE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tong Hsing Electronic and Chroma ATE, you can compare the effects of market volatilities on Tong Hsing and Chroma ATE 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 Tong Hsing with a short position of Chroma ATE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tong Hsing and Chroma ATE.
Diversification Opportunities for Tong Hsing and Chroma ATE
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Tong and Chroma is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Tong Hsing Electronic and Chroma ATE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chroma ATE and Tong Hsing 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 Tong Hsing Electronic are associated (or correlated) with Chroma ATE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chroma ATE has no effect on the direction of Tong Hsing i.e., Tong Hsing and Chroma ATE go up and down completely randomly.
Pair Corralation between Tong Hsing and Chroma ATE
Assuming the 90 days trading horizon Tong Hsing Electronic is expected to generate 0.53 times more return on investment than Chroma ATE. However, Tong Hsing Electronic is 1.89 times less risky than Chroma ATE. It trades about 0.18 of its potential returns per unit of risk. Chroma ATE is currently generating about 0.06 per unit of risk. If you would invest 12,550 in Tong Hsing Electronic on November 27, 2024 and sell it today you would earn a total of 650.00 from holding Tong Hsing Electronic or generate 5.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tong Hsing Electronic vs. Chroma ATE
Performance |
| Timeline |
| Tong Hsing Electronic |
| Chroma ATE |
Tong Hsing and Chroma ATE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tong Hsing and Chroma ATE
The main advantage of trading using opposite Tong Hsing and Chroma ATE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tong Hsing position performs unexpectedly, Chroma ATE 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 Chroma ATE will offset losses from the drop in Chroma ATE's long position.| Tong Hsing vs. Kinsus Interconnect Technology | Tong Hsing vs. Unimicron Technology Corp | Tong Hsing vs. Nan Ya Printed | Tong Hsing vs. WIN Semiconductors |
| Chroma ATE vs. Accton Technology Corp | Chroma ATE vs. Delta Electronics | Chroma ATE vs. Chicony Electronics Co | Chroma ATE vs. Advantech Co |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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