Correlation Between Trusval Technology and Baotek Industrial
Can any of the company-specific risk be diversified away by investing in both Trusval Technology and Baotek Industrial 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 Trusval Technology and Baotek Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trusval Technology Co and Baotek Industrial Materials, you can compare the effects of market volatilities on Trusval Technology and Baotek Industrial 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 Trusval Technology with a short position of Baotek Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trusval Technology and Baotek Industrial.
Diversification Opportunities for Trusval Technology and Baotek Industrial
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Trusval and Baotek is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Trusval Technology Co and Baotek Industrial Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baotek Industrial and Trusval Technology 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 Trusval Technology Co are associated (or correlated) with Baotek Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baotek Industrial has no effect on the direction of Trusval Technology i.e., Trusval Technology and Baotek Industrial go up and down completely randomly.
Pair Corralation between Trusval Technology and Baotek Industrial
Assuming the 90 days trading horizon Trusval Technology Co is expected to under-perform the Baotek Industrial. But the stock apears to be less risky and, when comparing its historical volatility, Trusval Technology Co is 1.22 times less risky than Baotek Industrial. The stock trades about -0.09 of its potential returns per unit of risk. The Baotek Industrial Materials is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 4,660 in Baotek Industrial Materials on September 12, 2024 and sell it today you would lose (350.00) from holding Baotek Industrial Materials or give up 7.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.41% |
| Values | Daily Returns |
Trusval Technology Co vs. Baotek Industrial Materials
Performance |
| Timeline |
| Trusval Technology |
| Baotek Industrial |
Trusval Technology and Baotek Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trusval Technology and Baotek Industrial
The main advantage of trading using opposite Trusval Technology and Baotek Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trusval Technology position performs unexpectedly, Baotek Industrial 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 Baotek Industrial will offset losses from the drop in Baotek Industrial's long position.| Trusval Technology vs. Victory New Materials | Trusval Technology vs. Nankang Rubber Tire | Trusval Technology vs. Asmedia Technology | Trusval Technology vs. AzureWave Technologies |
| Baotek Industrial vs. Eclat Textile Co | Baotek Industrial vs. Ruentex Industries | Baotek Industrial vs. Shinkong Synthetic Fiber | Baotek Industrial vs. Taiwan Paiho |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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