Correlation Between Ton Yi and Wha Yu
Can any of the company-specific risk be diversified away by investing in both Ton Yi and Wha Yu 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 Wha Yu 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 Wha Yu Industrial, you can compare the effects of market volatilities on Ton Yi and Wha Yu 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 Wha Yu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ton Yi and Wha Yu.
Diversification Opportunities for Ton Yi and Wha Yu
Very good diversification
The 3 months correlation between Ton and Wha is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Ton Yi Industrial and Wha Yu Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wha Yu 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 Wha Yu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wha Yu Industrial has no effect on the direction of Ton Yi i.e., Ton Yi and Wha Yu go up and down completely randomly.
Pair Corralation between Ton Yi and Wha Yu
Assuming the 90 days trading horizon Ton Yi is expected to generate 1.61 times less return on investment than Wha Yu. But when comparing it to its historical volatility, Ton Yi Industrial is 1.7 times less risky than Wha Yu. It trades about 0.04 of its potential returns per unit of risk. Wha Yu Industrial is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,785 in Wha Yu Industrial on September 1, 2024 and sell it today you would earn a total of 145.00 from holding Wha Yu Industrial or generate 8.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ton Yi Industrial vs. Wha Yu Industrial
Performance |
| Timeline |
| Ton Yi Industrial |
| Wha Yu Industrial |
Ton Yi and Wha Yu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ton Yi and Wha Yu
The main advantage of trading using opposite Ton Yi and Wha Yu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ton Yi position performs unexpectedly, Wha Yu 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 Wha Yu will offset losses from the drop in Wha Yu's long position.| Ton Yi vs. Far Eastern Department | Ton Yi vs. Chang Hwa Commercial | Ton Yi vs. Zinwell | Ton Yi vs. Evergreen International Storage |
| Wha Yu vs. Gemtek Technology Co | Wha Yu vs. Arcadyan Technology Corp | Wha Yu vs. Zinwell | Wha Yu vs. Silitech Technology 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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