Correlation Between Ton Yi and Tainan Spinning
Can any of the company-specific risk be diversified away by investing in both Ton Yi and Tainan Spinning 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 Ton Yi and Tainan Spinning into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ton Yi Industrial and Tainan Spinning Co, you can compare the effects of market volatilities on Ton Yi and Tainan Spinning 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 Ton Yi with a short position of Tainan Spinning. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ton Yi and Tainan Spinning.
Diversification Opportunities for Ton Yi and Tainan Spinning
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ton and Tainan is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Ton Yi Industrial and Tainan Spinning Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tainan Spinning and Ton Yi 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 Ton Yi Industrial are associated (or correlated) with Tainan Spinning. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tainan Spinning has no effect on the direction of Ton Yi i.e., Ton Yi and Tainan Spinning go up and down completely randomly.
Pair Corralation between Ton Yi and Tainan Spinning
Assuming the 90 days trading horizon Ton Yi Industrial is expected to generate 0.88 times more return on investment than Tainan Spinning. However, Ton Yi Industrial is 1.14 times less risky than Tainan Spinning. It trades about -0.01 of its potential returns per unit of risk. Tainan Spinning Co is currently generating about -0.01 per unit of risk. If you would invest 1,710 in Ton Yi Industrial on September 12, 2024 and sell it today you would lose (115.00) from holding Ton Yi Industrial or give up 6.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ton Yi Industrial vs. Tainan Spinning Co
Performance |
| Timeline |
| Ton Yi Industrial |
| Tainan Spinning |
Ton Yi and Tainan Spinning Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ton Yi and Tainan Spinning
The main advantage of trading using opposite Ton Yi and Tainan Spinning positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ton Yi position performs unexpectedly, Tainan Spinning 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 Tainan Spinning will offset losses from the drop in Tainan Spinning's long position.| Ton Yi vs. Tainan Spinning Co | Ton Yi vs. Lealea Enterprise Co | Ton Yi vs. China Petrochemical Development | Ton Yi vs. Ruentex Development Co |
| Tainan Spinning vs. Lealea Enterprise Co | Tainan Spinning vs. China Petrochemical Development | Tainan Spinning vs. Li Peng Enterprise | Tainan Spinning vs. Oriental Union Chemical |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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