Correlation Between Tingyi Holding and Tehmag Foods
Can any of the company-specific risk be diversified away by investing in both Tingyi Holding 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 Tingyi Holding and Tehmag Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tingyi Holding Corp and Tehmag Foods, you can compare the effects of market volatilities on Tingyi Holding 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 Tingyi Holding with a short position of Tehmag Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tingyi Holding and Tehmag Foods.
Diversification Opportunities for Tingyi Holding and Tehmag Foods
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Tingyi and Tehmag is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Tingyi Holding Corp and Tehmag Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tehmag Foods and Tingyi Holding 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 Tingyi Holding Corp 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 Tingyi Holding i.e., Tingyi Holding and Tehmag Foods go up and down completely randomly.
Pair Corralation between Tingyi Holding and Tehmag Foods
Assuming the 90 days trading horizon Tingyi Holding Corp is expected to generate 5.49 times more return on investment than Tehmag Foods. However, Tingyi Holding is 5.49 times more volatile than Tehmag Foods. It trades about 0.28 of its potential returns per unit of risk. Tehmag Foods is currently generating about 0.2 per unit of risk. If you would invest 2,120 in Tingyi Holding Corp on October 29, 2024 and sell it today you would earn a total of 290.00 from holding Tingyi Holding Corp or generate 13.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tingyi Holding Corp vs. Tehmag Foods
Performance |
| Timeline |
| Tingyi Holding Corp |
| Tehmag Foods |
Tingyi Holding and Tehmag Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tingyi Holding and Tehmag Foods
The main advantage of trading using opposite Tingyi Holding and Tehmag Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tingyi Holding 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.| Tingyi Holding vs. Uni President Enterprises Corp | Tingyi Holding vs. President Chain Store | Tingyi Holding vs. Formosa Chemicals Fibre | Tingyi Holding vs. Formosa Petrochemical Corp |
| Tehmag Foods vs. Asia Metal Industries | Tehmag Foods vs. Microelectronics Technology | Tehmag Foods vs. Amulaire Thermal Technology | Tehmag Foods vs. Camellia Metal Co |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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