Correlation Between Top Frontier and Integrated Micro
Can any of the company-specific risk be diversified away by investing in both Top Frontier and Integrated Micro 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 Top Frontier and Integrated Micro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Top Frontier Investment and Integrated Micro Electronics, you can compare the effects of market volatilities on Top Frontier and Integrated Micro 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 Top Frontier with a short position of Integrated Micro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Top Frontier and Integrated Micro.
Diversification Opportunities for Top Frontier and Integrated Micro
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Top and Integrated is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Top Frontier Investment and Integrated Micro Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integrated Micro Ele and Top Frontier 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 Top Frontier Investment are associated (or correlated) with Integrated Micro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integrated Micro Ele has no effect on the direction of Top Frontier i.e., Top Frontier and Integrated Micro go up and down completely randomly.
Pair Corralation between Top Frontier and Integrated Micro
Assuming the 90 days trading horizon Top Frontier Investment is expected to generate 1.66 times more return on investment than Integrated Micro. However, Top Frontier is 1.66 times more volatile than Integrated Micro Electronics. It trades about 0.04 of its potential returns per unit of risk. Integrated Micro Electronics is currently generating about -0.03 per unit of risk. If you would invest 6,500 in Top Frontier Investment on August 31, 2024 and sell it today you would earn a total of 100.00 from holding Top Frontier Investment or generate 1.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 85.71% |
| Values | Daily Returns |
Top Frontier Investment vs. Integrated Micro Electronics
Performance |
| Timeline |
| Top Frontier Investment |
| Integrated Micro Ele |
Top Frontier and Integrated Micro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Top Frontier and Integrated Micro
The main advantage of trading using opposite Top Frontier and Integrated Micro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Top Frontier position performs unexpectedly, Integrated Micro 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 Integrated Micro will offset losses from the drop in Integrated Micro's long position.| Top Frontier vs. GT Capital Holdings | Top Frontier vs. Allhome Corp | Top Frontier vs. Jollibee Foods Corp | Top Frontier vs. LFM Properties Corp |
| Integrated Micro vs. GT Capital Holdings | Integrated Micro vs. Allhome Corp | Integrated Micro vs. Jollibee Foods Corp | Integrated Micro vs. LFM Properties 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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