Correlation Between TKS Technologies and Tong Hua
Can any of the company-specific risk be diversified away by investing in both TKS Technologies 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 TKS Technologies and Tong Hua into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TKS Technologies Public and Tong Hua Holding, you can compare the effects of market volatilities on TKS Technologies 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 TKS Technologies with a short position of Tong Hua. Check out your portfolio center. Please also check ongoing floating volatility patterns of TKS Technologies and Tong Hua.
Diversification Opportunities for TKS Technologies and Tong Hua
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between TKS and Tong is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding TKS Technologies 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 TKS Technologies 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 TKS Technologies 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 TKS Technologies i.e., TKS Technologies and Tong Hua go up and down completely randomly.
Pair Corralation between TKS Technologies and Tong Hua
Assuming the 90 days trading horizon TKS Technologies is expected to generate 1.0 times less return on investment than Tong Hua. But when comparing it to its historical volatility, TKS Technologies Public is 1.0 times less risky than Tong Hua. It trades about 0.08 of its potential returns per unit of risk. Tong Hua Holding is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 93.00 in Tong Hua Holding on August 29, 2024 and sell it today you would lose (23.00) from holding Tong Hua Holding or give up 24.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TKS Technologies Public vs. Tong Hua Holding
Performance |
| Timeline |
| TKS Technologies Public |
| Tong Hua Holding |
TKS Technologies and Tong Hua Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TKS Technologies and Tong Hua
The main advantage of trading using opposite TKS Technologies and Tong Hua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TKS Technologies 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.| TKS Technologies vs. Synnex Public | TKS Technologies vs. SiS Distribution Public | TKS Technologies vs. Thoresen Thai Agencies | TKS Technologies vs. SVI Public |
| Tong Hua vs. Synnex Public | Tong Hua vs. SVI Public | Tong Hua vs. Interlink Communication Public | Tong Hua vs. SCG PACKAGING PCL NVDR |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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