Correlation Between Tingyi Holding and Global Lighting
Can any of the company-specific risk be diversified away by investing in both Tingyi Holding and Global Lighting 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 Global Lighting 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 Global Lighting Technologies, you can compare the effects of market volatilities on Tingyi Holding and Global Lighting 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 Global Lighting. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tingyi Holding and Global Lighting.
Diversification Opportunities for Tingyi Holding and Global Lighting
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tingyi and Global is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Tingyi Holding Corp and Global Lighting Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Lighting Tech 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 Global Lighting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Lighting Tech has no effect on the direction of Tingyi Holding i.e., Tingyi Holding and Global Lighting go up and down completely randomly.
Pair Corralation between Tingyi Holding and Global Lighting
Assuming the 90 days trading horizon Tingyi Holding Corp is expected to under-perform the Global Lighting. But the stock apears to be less risky and, when comparing its historical volatility, Tingyi Holding Corp is 1.19 times less risky than Global Lighting. The stock trades about -0.02 of its potential returns per unit of risk. The Global Lighting Technologies is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 5,810 in Global Lighting Technologies on September 4, 2024 and sell it today you would earn a total of 350.00 from holding Global Lighting Technologies or generate 6.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tingyi Holding Corp vs. Global Lighting Technologies
Performance |
| Timeline |
| Tingyi Holding Corp |
| Global Lighting Tech |
Tingyi Holding and Global Lighting Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tingyi Holding and Global Lighting
The main advantage of trading using opposite Tingyi Holding and Global Lighting positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tingyi Holding position performs unexpectedly, Global Lighting 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 Global Lighting will offset losses from the drop in Global Lighting's long position.| Tingyi Holding vs. Uni President Enterprises Corp | Tingyi Holding vs. Lien Hwa Industrial | Tingyi Holding vs. Great Wall Enterprise | Tingyi Holding vs. Standard Foods Corp |
| Global Lighting vs. Arcadyan Technology Corp | Global Lighting vs. Zhen Ding Technology | Global Lighting vs. Taiwan Surface Mounting | Global Lighting vs. Flexium Interconnect |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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