Correlation Between Tong Hsing and Shieh Yih
Can any of the company-specific risk be diversified away by investing in both Tong Hsing and Shieh Yih 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 Shieh Yih 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 Shieh Yih Machinery, you can compare the effects of market volatilities on Tong Hsing and Shieh Yih 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 Shieh Yih. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tong Hsing and Shieh Yih.
Diversification Opportunities for Tong Hsing and Shieh Yih
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Tong and Shieh is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Tong Hsing Electronic and Shieh Yih Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shieh Yih Machinery 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 Shieh Yih. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shieh Yih Machinery has no effect on the direction of Tong Hsing i.e., Tong Hsing and Shieh Yih go up and down completely randomly.
Pair Corralation between Tong Hsing and Shieh Yih
Assuming the 90 days trading horizon Tong Hsing Electronic is expected to under-perform the Shieh Yih. But the stock apears to be less risky and, when comparing its historical volatility, Tong Hsing Electronic is 1.72 times less risky than Shieh Yih. The stock trades about -0.02 of its potential returns per unit of risk. The Shieh Yih Machinery is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,648 in Shieh Yih Machinery on October 25, 2024 and sell it today you would earn a total of 617.00 from holding Shieh Yih Machinery or generate 23.3% 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. Shieh Yih Machinery
Performance |
| Timeline |
| Tong Hsing Electronic |
| Shieh Yih Machinery |
Tong Hsing and Shieh Yih Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tong Hsing and Shieh Yih
The main advantage of trading using opposite Tong Hsing and Shieh Yih positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tong Hsing position performs unexpectedly, Shieh Yih 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 Shieh Yih will offset losses from the drop in Shieh Yih'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 |
| Shieh Yih vs. Davicom Semiconductor | Shieh Yih vs. Advanced Wireless Semiconductor | Shieh Yih vs. Orient Semiconductor Electronics | Shieh Yih vs. Sports Gear 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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