Correlation Between Tingyi Holding and Song Ho
Can any of the company-specific risk be diversified away by investing in both Tingyi Holding and Song Ho 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 Song Ho 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 Song Ho Industrial, you can compare the effects of market volatilities on Tingyi Holding and Song Ho 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 Song Ho. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tingyi Holding and Song Ho.
Diversification Opportunities for Tingyi Holding and Song Ho
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tingyi and Song is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Tingyi Holding Corp and Song Ho Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Song Ho Industrial 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 Song Ho. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Song Ho Industrial has no effect on the direction of Tingyi Holding i.e., Tingyi Holding and Song Ho go up and down completely randomly.
Pair Corralation between Tingyi Holding and Song Ho
Assuming the 90 days trading horizon Tingyi Holding Corp is expected to under-perform the Song Ho. In addition to that, Tingyi Holding is 2.35 times more volatile than Song Ho Industrial. It trades about -0.02 of its total potential returns per unit of risk. Song Ho Industrial is currently generating about -0.01 per unit of volatility. If you would invest 2,869 in Song Ho Industrial on September 2, 2024 and sell it today you would lose (89.00) from holding Song Ho Industrial or give up 3.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Tingyi Holding Corp vs. Song Ho Industrial
Performance |
| Timeline |
| Tingyi Holding Corp |
| Song Ho Industrial |
Tingyi Holding and Song Ho Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tingyi Holding and Song Ho
The main advantage of trading using opposite Tingyi Holding and Song Ho positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tingyi Holding position performs unexpectedly, Song Ho 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 Song Ho will offset losses from the drop in Song Ho'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 |
| Song Ho vs. Elite Semiconductor Memory | Song Ho vs. Founding Construction Development | Song Ho vs. uPI Semiconductor Corp | Song Ho vs. Hung Sheng Construction |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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