Correlation Between Tingyi Holding and NEXCOM International
Can any of the company-specific risk be diversified away by investing in both Tingyi Holding and NEXCOM International 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 NEXCOM International 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 NEXCOM International Co, you can compare the effects of market volatilities on Tingyi Holding and NEXCOM International 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 NEXCOM International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tingyi Holding and NEXCOM International.
Diversification Opportunities for Tingyi Holding and NEXCOM International
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tingyi and NEXCOM is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Tingyi Holding Corp and NEXCOM International Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEXCOM International 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 NEXCOM International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEXCOM International has no effect on the direction of Tingyi Holding i.e., Tingyi Holding and NEXCOM International go up and down completely randomly.
Pair Corralation between Tingyi Holding and NEXCOM International
Assuming the 90 days trading horizon Tingyi Holding Corp is expected to generate 0.62 times more return on investment than NEXCOM International. However, Tingyi Holding Corp is 1.63 times less risky than NEXCOM International. It trades about 0.15 of its potential returns per unit of risk. NEXCOM International Co is currently generating about -0.21 per unit of risk. If you would invest 2,560 in Tingyi Holding Corp on January 22, 2025 and sell it today you would earn a total of 230.00 from holding Tingyi Holding Corp or generate 8.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Tingyi Holding Corp vs. NEXCOM International Co
Performance |
| Timeline |
| Tingyi Holding Corp |
| NEXCOM International |
Tingyi Holding and NEXCOM International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tingyi Holding and NEXCOM International
The main advantage of trading using opposite Tingyi Holding and NEXCOM International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tingyi Holding position performs unexpectedly, NEXCOM International 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 NEXCOM International will offset losses from the drop in NEXCOM International's 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 |
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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