Correlation Between Synnex Public and Tong Hua
Can any of the company-specific risk be diversified away by investing in both Synnex Public and Tong Hua 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 Synnex Public and Tong Hua into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Synnex Public and Tong Hua Holding, you can compare the effects of market volatilities on Synnex Public and Tong Hua 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 Synnex Public with a short position of Tong Hua. Check out your portfolio center. Please also check ongoing floating volatility patterns of Synnex Public and Tong Hua.
Diversification Opportunities for Synnex Public and Tong Hua
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Synnex and Tong is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Synnex Public and Tong Hua Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tong Hua Holding and Synnex Public 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 Synnex Public are associated (or correlated) with Tong Hua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tong Hua Holding has no effect on the direction of Synnex Public i.e., Synnex Public and Tong Hua go up and down completely randomly.
Pair Corralation between Synnex Public and Tong Hua
Assuming the 90 days trading horizon Synnex Public is expected to generate 55.26 times less return on investment than Tong Hua. But when comparing it to its historical volatility, Synnex Public is 19.63 times less risky than Tong Hua. It trades about 0.01 of its potential returns per unit of risk. Tong Hua Holding is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 254.00 in Tong Hua Holding on September 1, 2024 and sell it today you would lose (181.00) from holding Tong Hua Holding or give up 71.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.77% |
| Values | Daily Returns |
Synnex Public vs. Tong Hua Holding
Performance |
| Timeline |
| Synnex Public |
| Tong Hua Holding |
Synnex Public and Tong Hua Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Synnex Public and Tong Hua
The main advantage of trading using opposite Synnex Public and Tong Hua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Synnex Public position performs unexpectedly, Tong Hua 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 Tong Hua will offset losses from the drop in Tong Hua's long position.| Synnex Public vs. Com7 PCL | Synnex Public vs. Jay Mart Public | Synnex Public vs. SiS Distribution Public | Synnex Public vs. KCE Electronics Public |
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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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