Correlation Between Hu Lane and Tung Thih
Can any of the company-specific risk be diversified away by investing in both Hu Lane and Tung Thih 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 Hu Lane and Tung Thih into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hu Lane Associate and Tung Thih Electronic, you can compare the effects of market volatilities on Hu Lane and Tung Thih 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 Hu Lane with a short position of Tung Thih. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hu Lane and Tung Thih.
Diversification Opportunities for Hu Lane and Tung Thih
Significant diversification
The 3 months correlation between 6279 and Tung is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Hu Lane Associate and Tung Thih Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tung Thih Electronic and Hu Lane 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 Hu Lane Associate are associated (or correlated) with Tung Thih. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tung Thih Electronic has no effect on the direction of Hu Lane i.e., Hu Lane and Tung Thih go up and down completely randomly.
Pair Corralation between Hu Lane and Tung Thih
Assuming the 90 days trading horizon Hu Lane Associate is expected to under-perform the Tung Thih. But the stock apears to be less risky and, when comparing its historical volatility, Hu Lane Associate is 1.99 times less risky than Tung Thih. The stock trades about -0.04 of its potential returns per unit of risk. The Tung Thih Electronic is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 9,970 in Tung Thih Electronic on September 1, 2024 and sell it today you would earn a total of 30.00 from holding Tung Thih Electronic or generate 0.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hu Lane Associate vs. Tung Thih Electronic
Performance |
| Timeline |
| Hu Lane Associate |
| Tung Thih Electronic |
Hu Lane and Tung Thih Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hu Lane and Tung Thih
The main advantage of trading using opposite Hu Lane and Tung Thih positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hu Lane position performs unexpectedly, Tung Thih 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 Tung Thih will offset losses from the drop in Tung Thih's long position.| Hu Lane vs. BizLink Holding | Hu Lane vs. Hota Industrial Mfg | Hu Lane vs. Tung Thih Electronic | Hu Lane vs. Actron Technology |
| Tung Thih vs. Hota Industrial Mfg | Tung Thih vs. BizLink Holding | Tung Thih vs. Cub Elecparts | Tung Thih vs. Hu Lane Associate |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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