Correlation Between Ton Yi and Cal Comp
Can any of the company-specific risk be diversified away by investing in both Ton Yi and Cal Comp 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 Cal Comp 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 Cal Comp Electronics Public, you can compare the effects of market volatilities on Ton Yi and Cal Comp 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 Cal Comp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ton Yi and Cal Comp.
Diversification Opportunities for Ton Yi and Cal Comp
Excellent diversification
The 3 months correlation between Ton and Cal is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Ton Yi Industrial and Cal Comp Electronics Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cal Comp Electronics 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 Cal Comp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cal Comp Electronics has no effect on the direction of Ton Yi i.e., Ton Yi and Cal Comp go up and down completely randomly.
Pair Corralation between Ton Yi and Cal Comp
Assuming the 90 days trading horizon Ton Yi Industrial is expected to under-perform the Cal Comp. But the stock apears to be less risky and, when comparing its historical volatility, Ton Yi Industrial is 2.87 times less risky than Cal Comp. The stock trades about -0.02 of its potential returns per unit of risk. The Cal Comp Electronics Public is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 405.00 in Cal Comp Electronics Public on September 12, 2024 and sell it today you would earn a total of 338.00 from holding Cal Comp Electronics Public or generate 83.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ton Yi Industrial vs. Cal Comp Electronics Public
Performance |
| Timeline |
| Ton Yi Industrial |
| Cal Comp Electronics |
Ton Yi and Cal Comp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ton Yi and Cal Comp
The main advantage of trading using opposite Ton Yi and Cal Comp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ton Yi position performs unexpectedly, Cal Comp 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 Cal Comp will offset losses from the drop in Cal Comp'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 |
| Cal Comp vs. Asustek Computer | Cal Comp vs. Micro Star International Co | Cal Comp vs. Compal Electronics | Cal Comp vs. Wistron 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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