Correlation Between Ton Yi and Insyde Software
Can any of the company-specific risk be diversified away by investing in both Ton Yi and Insyde Software 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 Insyde Software 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 Insyde Software, you can compare the effects of market volatilities on Ton Yi and Insyde Software 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 Insyde Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ton Yi and Insyde Software.
Diversification Opportunities for Ton Yi and Insyde Software
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ton and Insyde is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Ton Yi Industrial and Insyde Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insyde Software 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 Insyde Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insyde Software has no effect on the direction of Ton Yi i.e., Ton Yi and Insyde Software go up and down completely randomly.
Pair Corralation between Ton Yi and Insyde Software
Assuming the 90 days trading horizon Ton Yi Industrial is expected to under-perform the Insyde Software. But the stock apears to be less risky and, when comparing its historical volatility, Ton Yi Industrial is 3.02 times less risky than Insyde Software. The stock trades about -0.01 of its potential returns per unit of risk. The Insyde Software is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 8,588 in Insyde Software on September 3, 2024 and sell it today you would earn a total of 38,212 from holding Insyde Software or generate 444.95% 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. Insyde Software
Performance |
| Timeline |
| Ton Yi Industrial |
| Insyde Software |
Ton Yi and Insyde Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ton Yi and Insyde Software
The main advantage of trading using opposite Ton Yi and Insyde Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ton Yi position performs unexpectedly, Insyde Software 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 Insyde Software will offset losses from the drop in Insyde Software's long position.The idea behind Ton Yi Industrial and Insyde Software pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Insyde Software vs. Ruentex Development Co | Insyde Software vs. Symtek Automation Asia | Insyde Software vs. CTCI Corp | Insyde Software vs. Information Technology Total |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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