Correlation Between China Times and Tung Thih
Can any of the company-specific risk be diversified away by investing in both China Times and Tung Thih 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 China Times and Tung Thih into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Times Publishing and Tung Thih Electronic, you can compare the effects of market volatilities on China Times and Tung Thih 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 China Times with a short position of Tung Thih. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Times and Tung Thih.
Diversification Opportunities for China Times and Tung Thih
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between China and Tung is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding China Times Publishing and Tung Thih Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tung Thih Electronic and China Times 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 China Times Publishing are associated (or correlated) with Tung Thih. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tung Thih Electronic has no effect on the direction of China Times i.e., China Times and Tung Thih go up and down completely randomly.
Pair Corralation between China Times and Tung Thih
Assuming the 90 days trading horizon China Times is expected to generate 2.07 times less return on investment than Tung Thih. In addition to that, China Times is 1.42 times more volatile than Tung Thih Electronic. It trades about 0.03 of its total potential returns per unit of risk. Tung Thih Electronic is currently generating about 0.1 per unit of volatility. If you would invest 8,110 in Tung Thih Electronic on September 12, 2024 and sell it today you would earn a total of 1,580 from holding Tung Thih Electronic or generate 19.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Times Publishing vs. Tung Thih Electronic
Performance |
| Timeline |
| China Times Publishing |
| Tung Thih Electronic |
China Times and Tung Thih Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Times and Tung Thih
The main advantage of trading using opposite China Times and Tung Thih positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Times position performs unexpectedly, Tung Thih 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 Tung Thih will offset losses from the drop in Tung Thih's long position.| China Times vs. YuantaP shares Taiwan Top | China Times vs. YuantaP shares Taiwan Electronics | China Times vs. Fubon MSCI Taiwan | China Times vs. YuantaP shares Taiwan Mid Cap |
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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