Correlation Between Thye Ming and Eagle Cold
Can any of the company-specific risk be diversified away by investing in both Thye Ming and Eagle Cold 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 Thye Ming and Eagle Cold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thye Ming Industrial and Eagle Cold Storage, you can compare the effects of market volatilities on Thye Ming and Eagle Cold 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 Thye Ming with a short position of Eagle Cold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thye Ming and Eagle Cold.
Diversification Opportunities for Thye Ming and Eagle Cold
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Thye and Eagle is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Thye Ming Industrial and Eagle Cold Storage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Cold Storage and Thye Ming 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 Thye Ming Industrial are associated (or correlated) with Eagle Cold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Cold Storage has no effect on the direction of Thye Ming i.e., Thye Ming and Eagle Cold go up and down completely randomly.
Pair Corralation between Thye Ming and Eagle Cold
Assuming the 90 days trading horizon Thye Ming is expected to generate 10.4 times less return on investment than Eagle Cold. In addition to that, Thye Ming is 1.02 times more volatile than Eagle Cold Storage. It trades about 0.02 of its total potential returns per unit of risk. Eagle Cold Storage is currently generating about 0.23 per unit of volatility. If you would invest 3,105 in Eagle Cold Storage on November 5, 2024 and sell it today you would earn a total of 55.00 from holding Eagle Cold Storage or generate 1.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thye Ming Industrial vs. Eagle Cold Storage
Performance |
| Timeline |
| Thye Ming Industrial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Eagle Cold Storage |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
Thye Ming and Eagle Cold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thye Ming and Eagle Cold
The main advantage of trading using opposite Thye Ming and Eagle Cold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thye Ming position performs unexpectedly, Eagle Cold 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 Eagle Cold will offset losses from the drop in Eagle Cold's long position.The idea behind Thye Ming Industrial and Eagle Cold Storage 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.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 CEOs Directory module to screen CEOs from public companies around the world.
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