Correlation Between Thye Ming and China Television
Can any of the company-specific risk be diversified away by investing in both Thye Ming and China Television 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 China Television 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 China Television Co, you can compare the effects of market volatilities on Thye Ming and China Television 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 China Television. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thye Ming and China Television.
Diversification Opportunities for Thye Ming and China Television
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Thye and China is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Thye Ming Industrial and China Television Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Television 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 China Television. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Television has no effect on the direction of Thye Ming i.e., Thye Ming and China Television go up and down completely randomly.
Pair Corralation between Thye Ming and China Television
Assuming the 90 days trading horizon Thye Ming Industrial is expected to generate 0.68 times more return on investment than China Television. However, Thye Ming Industrial is 1.48 times less risky than China Television. It trades about 0.07 of its potential returns per unit of risk. China Television Co is currently generating about -0.01 per unit of risk. If you would invest 3,820 in Thye Ming Industrial on October 30, 2024 and sell it today you would earn a total of 2,790 from holding Thye Ming Industrial or generate 73.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thye Ming Industrial vs. China Television Co
Performance |
| Timeline |
| Thye Ming Industrial |
| China Television |
Thye Ming and China Television Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thye Ming and China Television
The main advantage of trading using opposite Thye Ming and China Television positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thye Ming position performs unexpectedly, China Television 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 China Television will offset losses from the drop in China Television's long position.| Thye Ming vs. CHC Resources Corp | Thye Ming vs. Taiwan Shin Kong | Thye Ming vs. Taiwan Secom Co | Thye Ming vs. Nak Sealing Technologies |
| China Television vs. Choice Development | China Television vs. Ton Yi Industrial | China Television vs. Taiwan Sakura Corp | China Television vs. Thye Ming Industrial |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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