Correlation Between Tai Tung and Ingentec
Can any of the company-specific risk be diversified away by investing in both Tai Tung and Ingentec 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 Tai Tung and Ingentec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tai Tung Communication and Ingentec, you can compare the effects of market volatilities on Tai Tung and Ingentec 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 Tai Tung with a short position of Ingentec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tai Tung and Ingentec.
Diversification Opportunities for Tai Tung and Ingentec
Poor diversification
The 3 months correlation between Tai and Ingentec is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Tai Tung Communication and Ingentec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ingentec and Tai Tung 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 Tai Tung Communication are associated (or correlated) with Ingentec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ingentec has no effect on the direction of Tai Tung i.e., Tai Tung and Ingentec go up and down completely randomly.
Pair Corralation between Tai Tung and Ingentec
Assuming the 90 days trading horizon Tai Tung Communication is expected to generate 1.03 times more return on investment than Ingentec. However, Tai Tung is 1.03 times more volatile than Ingentec. It trades about 0.05 of its potential returns per unit of risk. Ingentec is currently generating about 0.02 per unit of risk. If you would invest 1,455 in Tai Tung Communication on October 24, 2024 and sell it today you would earn a total of 795.00 from holding Tai Tung Communication or generate 54.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tai Tung Communication vs. Ingentec
Performance |
| Timeline |
| Tai Tung Communication |
| Ingentec |
Tai Tung and Ingentec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tai Tung and Ingentec
The main advantage of trading using opposite Tai Tung and Ingentec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tai Tung position performs unexpectedly, Ingentec 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 Ingentec will offset losses from the drop in Ingentec's long position.| Tai Tung vs. Zinwell | Tai Tung vs. Mercuries Life Insurance | Tai Tung vs. Darwin Precisions Corp | Tai Tung vs. Jinli Group Holdings |
| Ingentec vs. Jetwell Computer Co | Ingentec vs. Elitegroup Computer Systems | Ingentec vs. Tai Tung Communication | Ingentec vs. Apex Biotechnology Corp |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |