Correlation Between Tong Hua and ARIP Public
Can any of the company-specific risk be diversified away by investing in both Tong Hua and ARIP Public 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 Tong Hua and ARIP Public into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tong Hua Holding and ARIP Public, you can compare the effects of market volatilities on Tong Hua and ARIP Public 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 Tong Hua with a short position of ARIP Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tong Hua and ARIP Public.
Diversification Opportunities for Tong Hua and ARIP Public
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Tong and ARIP is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Tong Hua Holding and ARIP Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ARIP Public and Tong Hua 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 Tong Hua Holding are associated (or correlated) with ARIP Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ARIP Public has no effect on the direction of Tong Hua i.e., Tong Hua and ARIP Public go up and down completely randomly.
Pair Corralation between Tong Hua and ARIP Public
Assuming the 90 days horizon Tong Hua Holding is expected to under-perform the ARIP Public. In addition to that, Tong Hua is 1.1 times more volatile than ARIP Public. It trades about -0.41 of its total potential returns per unit of risk. ARIP Public is currently generating about -0.13 per unit of volatility. If you would invest 64.00 in ARIP Public on August 29, 2024 and sell it today you would lose (6.00) from holding ARIP Public or give up 9.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Tong Hua Holding vs. ARIP Public
Performance |
| Timeline |
| Tong Hua Holding |
| ARIP Public |
Tong Hua and ARIP Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tong Hua and ARIP Public
The main advantage of trading using opposite Tong Hua and ARIP Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tong Hua position performs unexpectedly, ARIP Public 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 ARIP Public will offset losses from the drop in ARIP Public's long position.| Tong Hua vs. Synnex Public | Tong Hua vs. SVI Public | Tong Hua vs. Interlink Communication Public | Tong Hua vs. SCG PACKAGING PCL NVDR |
| ARIP Public vs. E for L | ARIP Public vs. Akkhie Prakarn Public | ARIP Public vs. Dimet Public | ARIP Public vs. Filter Vision Public |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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