Correlation Between Tycoons Worldwide and Wah Hong
Can any of the company-specific risk be diversified away by investing in both Tycoons Worldwide and Wah Hong 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 Tycoons Worldwide and Wah Hong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tycoons Worldwide Group and Wah Hong Industrial, you can compare the effects of market volatilities on Tycoons Worldwide and Wah Hong 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 Tycoons Worldwide with a short position of Wah Hong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tycoons Worldwide and Wah Hong.
Diversification Opportunities for Tycoons Worldwide and Wah Hong
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Tycoons and Wah is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Tycoons Worldwide Group and Wah Hong Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wah Hong Industrial and Tycoons Worldwide 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 Tycoons Worldwide Group are associated (or correlated) with Wah Hong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wah Hong Industrial has no effect on the direction of Tycoons Worldwide i.e., Tycoons Worldwide and Wah Hong go up and down completely randomly.
Pair Corralation between Tycoons Worldwide and Wah Hong
Assuming the 90 days trading horizon Tycoons Worldwide Group is expected to under-perform the Wah Hong. But the stock apears to be less risky and, when comparing its historical volatility, Tycoons Worldwide Group is 2.28 times less risky than Wah Hong. The stock trades about -0.05 of its potential returns per unit of risk. The Wah Hong Industrial is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 3,500 in Wah Hong Industrial on September 2, 2024 and sell it today you would earn a total of 1,170 from holding Wah Hong Industrial or generate 33.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tycoons Worldwide Group vs. Wah Hong Industrial
Performance |
| Timeline |
| Tycoons Worldwide |
| Wah Hong Industrial |
Tycoons Worldwide and Wah Hong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tycoons Worldwide and Wah Hong
The main advantage of trading using opposite Tycoons Worldwide and Wah Hong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tycoons Worldwide position performs unexpectedly, Wah Hong 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 Wah Hong will offset losses from the drop in Wah Hong's long position.| Tycoons Worldwide vs. Synmosa Biopharma | Tycoons Worldwide vs. Taiwan Glass Ind | Tycoons Worldwide vs. Tong Tai Machine Tool | Tycoons Worldwide vs. Oriental Union Chemical |
| Wah Hong vs. Hon Hai Precision | Wah Hong vs. Delta Electronics | Wah Hong vs. LARGAN Precision Co | Wah Hong vs. Yageo Corp |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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