Correlation Between Cleanaway and Tehmag Foods
Can any of the company-specific risk be diversified away by investing in both Cleanaway and Tehmag Foods 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 Cleanaway and Tehmag Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cleanaway Co and Tehmag Foods, you can compare the effects of market volatilities on Cleanaway and Tehmag Foods 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 Cleanaway with a short position of Tehmag Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cleanaway and Tehmag Foods.
Diversification Opportunities for Cleanaway and Tehmag Foods
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cleanaway and Tehmag is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Cleanaway Co and Tehmag Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tehmag Foods and Cleanaway 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 Cleanaway Co are associated (or correlated) with Tehmag Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tehmag Foods has no effect on the direction of Cleanaway i.e., Cleanaway and Tehmag Foods go up and down completely randomly.
Pair Corralation between Cleanaway and Tehmag Foods
Assuming the 90 days trading horizon Cleanaway Co is expected to generate 0.82 times more return on investment than Tehmag Foods. However, Cleanaway Co is 1.22 times less risky than Tehmag Foods. It trades about -0.2 of its potential returns per unit of risk. Tehmag Foods is currently generating about -0.17 per unit of risk. If you would invest 18,350 in Cleanaway Co on August 25, 2024 and sell it today you would lose (250.00) from holding Cleanaway Co or give up 1.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cleanaway Co vs. Tehmag Foods
Performance |
| Timeline |
| Cleanaway |
| Tehmag Foods |
Cleanaway and Tehmag Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cleanaway and Tehmag Foods
The main advantage of trading using opposite Cleanaway and Tehmag Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cleanaway position performs unexpectedly, Tehmag Foods 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 Tehmag Foods will offset losses from the drop in Tehmag Foods' long position.| Cleanaway vs. Sunny Friend Environmental | Cleanaway vs. Taiwan Secom Co | Cleanaway vs. TTET Union Corp | Cleanaway vs. ECOVE Environment Corp |
| Tehmag Foods vs. Uni President Enterprises Corp | Tehmag Foods vs. Tingyi Holding Corp | Tehmag Foods vs. Lien Hwa Industrial | Tehmag Foods vs. Great Wall Enterprise |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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