Correlation Between GAME HOURS and Tainet Communication
Can any of the company-specific risk be diversified away by investing in both GAME HOURS and Tainet Communication 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 GAME HOURS and Tainet Communication into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GAME HOURS and Tainet Communication System, you can compare the effects of market volatilities on GAME HOURS and Tainet Communication 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 GAME HOURS with a short position of Tainet Communication. Check out your portfolio center. Please also check ongoing floating volatility patterns of GAME HOURS and Tainet Communication.
Diversification Opportunities for GAME HOURS and Tainet Communication
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GAME and Tainet is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding GAME HOURS and Tainet Communication System in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tainet Communication and GAME HOURS 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 GAME HOURS are associated (or correlated) with Tainet Communication. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tainet Communication has no effect on the direction of GAME HOURS i.e., GAME HOURS and Tainet Communication go up and down completely randomly.
Pair Corralation between GAME HOURS and Tainet Communication
Assuming the 90 days trading horizon GAME HOURS is expected to generate 1.96 times more return on investment than Tainet Communication. However, GAME HOURS is 1.96 times more volatile than Tainet Communication System. It trades about 0.05 of its potential returns per unit of risk. Tainet Communication System is currently generating about -0.06 per unit of risk. If you would invest 1,055 in GAME HOURS on December 1, 2024 and sell it today you would earn a total of 20.00 from holding GAME HOURS or generate 1.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GAME HOURS vs. Tainet Communication System
Performance |
| Timeline |
| GAME HOURS |
| Tainet Communication |
GAME HOURS and Tainet Communication Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GAME HOURS and Tainet Communication
The main advantage of trading using opposite GAME HOURS and Tainet Communication positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GAME HOURS position performs unexpectedly, Tainet Communication 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 Tainet Communication will offset losses from the drop in Tainet Communication's long position.| GAME HOURS vs. General Plastic Industrial | GAME HOURS vs. I Jang Industrial | GAME HOURS vs. Feng Ching Metal | GAME HOURS vs. Aerospace Industrial Development |
| Tainet Communication vs. Sporton International | Tainet Communication vs. Tung Ho Steel | Tainet Communication vs. Sports Gear Co | Tainet Communication vs. Tehmag Foods |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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