Correlation Between Nan Ya and Tong Hsing
Can any of the company-specific risk be diversified away by investing in both Nan Ya and Tong Hsing 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 Nan Ya and Tong Hsing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nan Ya Printed and Tong Hsing Electronic, you can compare the effects of market volatilities on Nan Ya and Tong Hsing 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 Nan Ya with a short position of Tong Hsing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nan Ya and Tong Hsing.
Diversification Opportunities for Nan Ya and Tong Hsing
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Nan and Tong is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Nan Ya Printed and Tong Hsing Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tong Hsing Electronic and Nan Ya 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 Nan Ya Printed are associated (or correlated) with Tong Hsing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tong Hsing Electronic has no effect on the direction of Nan Ya i.e., Nan Ya and Tong Hsing go up and down completely randomly.
Pair Corralation between Nan Ya and Tong Hsing
Assuming the 90 days trading horizon Nan Ya Printed is expected to generate 1.72 times more return on investment than Tong Hsing. However, Nan Ya is 1.72 times more volatile than Tong Hsing Electronic. It trades about 0.18 of its potential returns per unit of risk. Tong Hsing Electronic is currently generating about -0.24 per unit of risk. If you would invest 11,750 in Nan Ya Printed on October 23, 2024 and sell it today you would earn a total of 1,450 from holding Nan Ya Printed or generate 12.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nan Ya Printed vs. Tong Hsing Electronic
Performance |
| Timeline |
| Nan Ya Printed |
| Tong Hsing Electronic |
Nan Ya and Tong Hsing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nan Ya and Tong Hsing
The main advantage of trading using opposite Nan Ya and Tong Hsing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nan Ya position performs unexpectedly, Tong Hsing 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 Tong Hsing will offset losses from the drop in Tong Hsing's long position.| Nan Ya vs. Clevo Co | Nan Ya vs. Gigastorage Corp | Nan Ya vs. KYE Systems Corp | Nan Ya vs. AVerMedia Technologies |
| Tong Hsing vs. Kinsus Interconnect Technology | Tong Hsing vs. Unimicron Technology Corp | Tong Hsing vs. Nan Ya Printed | Tong Hsing vs. WIN Semiconductors |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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