Correlation Between Ton Yi and Shiny Chemical
Can any of the company-specific risk be diversified away by investing in both Ton Yi and Shiny Chemical 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 Shiny Chemical 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 Shiny Chemical Industrial, you can compare the effects of market volatilities on Ton Yi and Shiny Chemical 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 Shiny Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ton Yi and Shiny Chemical.
Diversification Opportunities for Ton Yi and Shiny Chemical
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ton and Shiny is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Ton Yi Industrial and Shiny Chemical Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shiny Chemical Industrial 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 Shiny Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shiny Chemical Industrial has no effect on the direction of Ton Yi i.e., Ton Yi and Shiny Chemical go up and down completely randomly.
Pair Corralation between Ton Yi and Shiny Chemical
Assuming the 90 days trading horizon Ton Yi Industrial is expected to under-perform the Shiny Chemical. But the stock apears to be less risky and, when comparing its historical volatility, Ton Yi Industrial is 1.49 times less risky than Shiny Chemical. The stock trades about -0.01 of its potential returns per unit of risk. The Shiny Chemical Industrial is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 11,500 in Shiny Chemical Industrial on August 26, 2024 and sell it today you would earn a total of 5,050 from holding Shiny Chemical Industrial or generate 43.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ton Yi Industrial vs. Shiny Chemical Industrial
Performance |
| Timeline |
| Ton Yi Industrial |
| Shiny Chemical Industrial |
Ton Yi and Shiny Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ton Yi and Shiny Chemical
The main advantage of trading using opposite Ton Yi and Shiny Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ton Yi position performs unexpectedly, Shiny Chemical 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 Shiny Chemical will offset losses from the drop in Shiny Chemical's long position.| Ton Yi vs. Cheng Shin Rubber | Ton Yi vs. Taiwan Cement Corp | Ton Yi vs. China Steel Chemical | Ton Yi vs. Yulon Motor Co |
| Shiny Chemical vs. Cheng Shin Rubber | Shiny Chemical vs. Taiwan Cement Corp | Shiny Chemical vs. China Steel Chemical | Shiny Chemical vs. Yulon Motor Co |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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