Correlation Between Empire State and Tung Ho
Can any of the company-specific risk be diversified away by investing in both Empire State and Tung Ho 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 Empire State and Tung Ho into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Empire State Realty and Tung Ho Textile, you can compare the effects of market volatilities on Empire State and Tung Ho 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 Empire State with a short position of Tung Ho. Check out your portfolio center. Please also check ongoing floating volatility patterns of Empire State and Tung Ho.
Diversification Opportunities for Empire State and Tung Ho
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Empire and Tung is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Empire State Realty and Tung Ho Textile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tung Ho Textile and Empire State 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 Empire State Realty are associated (or correlated) with Tung Ho. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tung Ho Textile has no effect on the direction of Empire State i.e., Empire State and Tung Ho go up and down completely randomly.
Pair Corralation between Empire State and Tung Ho
Given the investment horizon of 90 days Empire State is expected to generate 1.5 times less return on investment than Tung Ho. In addition to that, Empire State is 1.29 times more volatile than Tung Ho Textile. It trades about 0.02 of its total potential returns per unit of risk. Tung Ho Textile is currently generating about 0.04 per unit of volatility. If you would invest 1,800 in Tung Ho Textile on November 27, 2024 and sell it today you would earn a total of 560.00 from holding Tung Ho Textile or generate 31.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.77% |
| Values | Daily Returns |
Empire State Realty vs. Tung Ho Textile
Performance |
| Timeline |
| Empire State Realty |
| Tung Ho Textile |
Empire State and Tung Ho Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Empire State and Tung Ho
The main advantage of trading using opposite Empire State and Tung Ho positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Empire State position performs unexpectedly, Tung Ho 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 Tung Ho will offset losses from the drop in Tung Ho's long position.| Empire State vs. Paramount Group | Empire State vs. Hudson Pacific Properties | Empire State vs. Equity Commonwealth | Empire State vs. Douglas Emmett |
| Tung Ho vs. Shinkong Synthetic Fiber | Tung Ho vs. Tainan Spinning Co | Tung Ho vs. Zig Sheng Industrial | Tung Ho vs. Lealea Enterprise Co |
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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