Correlation Between HIM International and TUL
Can any of the company-specific risk be diversified away by investing in both HIM International and TUL 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 HIM International and TUL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HIM International Music and TUL Corporation, you can compare the effects of market volatilities on HIM International and TUL 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 HIM International with a short position of TUL. Check out your portfolio center. Please also check ongoing floating volatility patterns of HIM International and TUL.
Diversification Opportunities for HIM International and TUL
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between HIM and TUL is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding HIM International Music and TUL Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TUL Corporation and HIM International 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 HIM International Music are associated (or correlated) with TUL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TUL Corporation has no effect on the direction of HIM International i.e., HIM International and TUL go up and down completely randomly.
Pair Corralation between HIM International and TUL
Assuming the 90 days trading horizon HIM International is expected to generate 2.41 times less return on investment than TUL. But when comparing it to its historical volatility, HIM International Music is 1.67 times less risky than TUL. It trades about 0.27 of its potential returns per unit of risk. TUL Corporation is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 7,040 in TUL Corporation on November 29, 2024 and sell it today you would earn a total of 760.00 from holding TUL Corporation or generate 10.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HIM International Music vs. TUL Corp.
Performance |
| Timeline |
| HIM International Music |
| TUL Corporation |
HIM International and TUL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HIM International and TUL
The main advantage of trading using opposite HIM International and TUL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HIM International position performs unexpectedly, TUL 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 TUL will offset losses from the drop in TUL's long position.| HIM International vs. TMP Steel | HIM International vs. China Times Publishing | HIM International vs. Taiwan Steel Union | HIM International vs. Yeou Yih Steel |
| TUL vs. Orient Semiconductor Electronics | TUL vs. CTBC Financial Holding | TUL vs. Pontex Polyblend CoLtd | TUL vs. Fubon Financial 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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