Correlation Between PlayNitride and Cayman Tung
Can any of the company-specific risk be diversified away by investing in both PlayNitride and Cayman Tung 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 PlayNitride and Cayman Tung into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PlayNitride and Cayman Tung Ling, you can compare the effects of market volatilities on PlayNitride and Cayman Tung 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 PlayNitride with a short position of Cayman Tung. Check out your portfolio center. Please also check ongoing floating volatility patterns of PlayNitride and Cayman Tung.
Diversification Opportunities for PlayNitride and Cayman Tung
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between PlayNitride and Cayman is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding PlayNitride and Cayman Tung Ling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cayman Tung Ling and PlayNitride 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 PlayNitride are associated (or correlated) with Cayman Tung. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cayman Tung Ling has no effect on the direction of PlayNitride i.e., PlayNitride and Cayman Tung go up and down completely randomly.
Pair Corralation between PlayNitride and Cayman Tung
Assuming the 90 days trading horizon PlayNitride is expected to generate 0.9 times more return on investment than Cayman Tung. However, PlayNitride is 1.11 times less risky than Cayman Tung. It trades about 0.14 of its potential returns per unit of risk. Cayman Tung Ling is currently generating about 0.05 per unit of risk. If you would invest 7,920 in PlayNitride on August 31, 2024 and sell it today you would earn a total of 6,130 from holding PlayNitride or generate 77.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PlayNitride vs. Cayman Tung Ling
Performance |
| Timeline |
| PlayNitride |
| Cayman Tung Ling |
PlayNitride and Cayman Tung Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PlayNitride and Cayman Tung
The main advantage of trading using opposite PlayNitride and Cayman Tung positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PlayNitride position performs unexpectedly, Cayman Tung 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 Cayman Tung will offset losses from the drop in Cayman Tung's long position.| PlayNitride vs. Taiwan Semiconductor Manufacturing | PlayNitride vs. Hon Hai Precision | PlayNitride vs. MediaTek | PlayNitride vs. Chunghwa Telecom Co |
| Cayman Tung vs. Orient Semiconductor Electronics | Cayman Tung vs. Vanguard International Semiconductor | Cayman Tung vs. HOYA Resort Hotel | Cayman Tung vs. FarGlory Hotel 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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