Correlation Between Ton Yi and Hsin Ba
Can any of the company-specific risk be diversified away by investing in both Ton Yi and Hsin Ba 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 Hsin Ba 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 Hsin Ba Ba, you can compare the effects of market volatilities on Ton Yi and Hsin Ba 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 Hsin Ba. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ton Yi and Hsin Ba.
Diversification Opportunities for Ton Yi and Hsin Ba
Very weak diversification
The 3 months correlation between Ton and Hsin is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Ton Yi Industrial and Hsin Ba Ba in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hsin Ba Ba 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 Hsin Ba. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hsin Ba Ba has no effect on the direction of Ton Yi i.e., Ton Yi and Hsin Ba go up and down completely randomly.
Pair Corralation between Ton Yi and Hsin Ba
Assuming the 90 days trading horizon Ton Yi Industrial is expected to under-perform the Hsin Ba. But the stock apears to be less risky and, when comparing its historical volatility, Ton Yi Industrial is 2.05 times less risky than Hsin Ba. The stock trades about -0.02 of its potential returns per unit of risk. The Hsin Ba Ba is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 4,810 in Hsin Ba Ba on October 30, 2024 and sell it today you would earn a total of 6,190 from holding Hsin Ba Ba or generate 128.69% 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. Hsin Ba Ba
Performance |
| Timeline |
| Ton Yi Industrial |
| Hsin Ba Ba |
Ton Yi and Hsin Ba Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ton Yi and Hsin Ba
The main advantage of trading using opposite Ton Yi and Hsin Ba positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ton Yi position performs unexpectedly, Hsin Ba 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 Hsin Ba will offset losses from the drop in Hsin Ba'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 |
| Hsin Ba vs. Great China Metal | Hsin Ba vs. Ton Yi Industrial | Hsin Ba vs. Ching Feng Home | Hsin Ba vs. Choice Development |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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