Correlation Between TONGDAO LIEPGR and TechnoPro Holdings
Can any of the company-specific risk be diversified away by investing in both TONGDAO LIEPGR and TechnoPro Holdings 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 TONGDAO LIEPGR and TechnoPro Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TONGDAO LIEPGR DL 0001 and TechnoPro Holdings, you can compare the effects of market volatilities on TONGDAO LIEPGR and TechnoPro Holdings 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 TONGDAO LIEPGR with a short position of TechnoPro Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of TONGDAO LIEPGR and TechnoPro Holdings.
Diversification Opportunities for TONGDAO LIEPGR and TechnoPro Holdings
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between TONGDAO and TechnoPro is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding TONGDAO LIEPGR DL 0001 and TechnoPro Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TechnoPro Holdings and TONGDAO LIEPGR 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 TONGDAO LIEPGR DL 0001 are associated (or correlated) with TechnoPro Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TechnoPro Holdings has no effect on the direction of TONGDAO LIEPGR i.e., TONGDAO LIEPGR and TechnoPro Holdings go up and down completely randomly.
Pair Corralation between TONGDAO LIEPGR and TechnoPro Holdings
Assuming the 90 days horizon TONGDAO LIEPGR DL 0001 is expected to under-perform the TechnoPro Holdings. In addition to that, TONGDAO LIEPGR is 2.85 times more volatile than TechnoPro Holdings. It trades about -0.06 of its total potential returns per unit of risk. TechnoPro Holdings is currently generating about 0.21 per unit of volatility. If you would invest 1,800 in TechnoPro Holdings on November 2, 2024 and sell it today you would earn a total of 140.00 from holding TechnoPro Holdings or generate 7.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
TONGDAO LIEPGR DL 0001 vs. TechnoPro Holdings
Performance |
| Timeline |
| TONGDAO LIEPGR DL |
| TechnoPro Holdings |
TONGDAO LIEPGR and TechnoPro Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TONGDAO LIEPGR and TechnoPro Holdings
The main advantage of trading using opposite TONGDAO LIEPGR and TechnoPro Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TONGDAO LIEPGR position performs unexpectedly, TechnoPro Holdings 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 TechnoPro Holdings will offset losses from the drop in TechnoPro Holdings' long position.| TONGDAO LIEPGR vs. Recruit Holdings Co | TONGDAO LIEPGR vs. Randstad NV | TONGDAO LIEPGR vs. Adecco Group AG | TONGDAO LIEPGR vs. PERSOL HOLDINGS LTD |
| TechnoPro Holdings vs. Recruit Holdings Co | TechnoPro Holdings vs. Randstad NV | TechnoPro Holdings vs. Adecco Group AG | TechnoPro Holdings vs. PERSOL HOLDINGS LTD |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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