Correlation Between Tong Hsing and Nuvoton Technology
Can any of the company-specific risk be diversified away by investing in both Tong Hsing and Nuvoton Technology 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 Nuvoton Technology 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 Nuvoton Technology Corp, you can compare the effects of market volatilities on Tong Hsing and Nuvoton Technology 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 Nuvoton Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tong Hsing and Nuvoton Technology.
Diversification Opportunities for Tong Hsing and Nuvoton Technology
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Tong and Nuvoton is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Tong Hsing Electronic and Nuvoton Technology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuvoton Technology Corp 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 Nuvoton Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuvoton Technology Corp has no effect on the direction of Tong Hsing i.e., Tong Hsing and Nuvoton Technology go up and down completely randomly.
Pair Corralation between Tong Hsing and Nuvoton Technology
Assuming the 90 days trading horizon Tong Hsing Electronic is expected to under-perform the Nuvoton Technology. But the stock apears to be less risky and, when comparing its historical volatility, Tong Hsing Electronic is 1.99 times less risky than Nuvoton Technology. The stock trades about -0.01 of its potential returns per unit of risk. The Nuvoton Technology Corp is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 8,000 in Nuvoton Technology Corp on September 12, 2024 and sell it today you would earn a total of 1,600 from holding Nuvoton Technology Corp or generate 20.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tong Hsing Electronic vs. Nuvoton Technology Corp
Performance |
| Timeline |
| Tong Hsing Electronic |
| Nuvoton Technology Corp |
Tong Hsing and Nuvoton Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tong Hsing and Nuvoton Technology
The main advantage of trading using opposite Tong Hsing and Nuvoton Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tong Hsing position performs unexpectedly, Nuvoton Technology 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 Nuvoton Technology will offset losses from the drop in Nuvoton Technology's long position.| Tong Hsing vs. AU Optronics | Tong Hsing vs. Innolux Corp | Tong Hsing vs. Ruentex Development Co | Tong Hsing vs. WiseChip Semiconductor |
| Nuvoton Technology vs. Global Unichip Corp | Nuvoton Technology vs. Holtek Semiconductor | Nuvoton Technology vs. Novatek Microelectronics Corp | Nuvoton Technology vs. Unimicron Technology 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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