Correlation Between Great Computer and TCI
Can any of the company-specific risk be diversified away by investing in both Great Computer and TCI 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 Great Computer and TCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Great Computer and TCI Co, you can compare the effects of market volatilities on Great Computer and TCI 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 Great Computer with a short position of TCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great Computer and TCI.
Diversification Opportunities for Great Computer and TCI
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Great and TCI is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Great Computer and TCI Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TCI Co and Great Computer 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 Great Computer are associated (or correlated) with TCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TCI Co has no effect on the direction of Great Computer i.e., Great Computer and TCI go up and down completely randomly.
Pair Corralation between Great Computer and TCI
Assuming the 90 days trading horizon Great Computer is expected to generate 3.55 times more return on investment than TCI. However, Great Computer is 3.55 times more volatile than TCI Co. It trades about 0.09 of its potential returns per unit of risk. TCI Co is currently generating about -0.16 per unit of risk. If you would invest 1,845 in Great Computer on September 1, 2024 and sell it today you would earn a total of 155.00 from holding Great Computer or generate 8.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Great Computer vs. TCI Co
Performance |
| Timeline |
| Great Computer |
| TCI Co |
Great Computer and TCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Great Computer and TCI
The main advantage of trading using opposite Great Computer and TCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great Computer position performs unexpectedly, TCI 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 TCI will offset losses from the drop in TCI's long position.| Great Computer vs. Chi Hua Fitness | Great Computer vs. CHC Healthcare Group | Great Computer vs. First Hotel Co | Great Computer vs. SS Healthcare Holding |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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