Correlation Between Century Iron and Tang Eng
Can any of the company-specific risk be diversified away by investing in both Century Iron and Tang Eng 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 Century Iron and Tang Eng into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Century Iron And and Tang Eng Iron, you can compare the effects of market volatilities on Century Iron and Tang Eng 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 Century Iron with a short position of Tang Eng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Century Iron and Tang Eng.
Diversification Opportunities for Century Iron and Tang Eng
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Century and Tang is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Century Iron And and Tang Eng Iron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tang Eng Iron and Century Iron 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 Century Iron And are associated (or correlated) with Tang Eng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tang Eng Iron has no effect on the direction of Century Iron i.e., Century Iron and Tang Eng go up and down completely randomly.
Pair Corralation between Century Iron and Tang Eng
Assuming the 90 days trading horizon Century Iron And is expected to generate 4.63 times more return on investment than Tang Eng. However, Century Iron is 4.63 times more volatile than Tang Eng Iron. It trades about 0.02 of its potential returns per unit of risk. Tang Eng Iron is currently generating about -0.02 per unit of risk. If you would invest 18,150 in Century Iron And on September 14, 2024 and sell it today you would lose (150.00) from holding Century Iron And or give up 0.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Century Iron And vs. Tang Eng Iron
Performance |
| Timeline |
| Century Iron And |
| Tang Eng Iron |
Century Iron and Tang Eng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Century Iron and Tang Eng
The main advantage of trading using opposite Century Iron and Tang Eng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Century Iron position performs unexpectedly, Tang Eng 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 Tang Eng will offset losses from the drop in Tang Eng's long position.| Century Iron vs. Tainan Spinning Co | Century Iron vs. Lealea Enterprise Co | Century Iron vs. China Petrochemical Development | Century Iron vs. Ruentex Development Co |
| Tang Eng vs. SS Healthcare Holding | Tang Eng vs. Dadi Early Childhood Education | Tang Eng vs. Weltrend Semiconductor | Tang Eng vs. Mospec Semiconductor 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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