Correlation Between Tong Tai and Aero Win
Can any of the company-specific risk be diversified away by investing in both Tong Tai and Aero Win 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 Tai and Aero Win into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tong Tai Machine Tool and Aero Win Technology, you can compare the effects of market volatilities on Tong Tai and Aero Win 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 Tai with a short position of Aero Win. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tong Tai and Aero Win.
Diversification Opportunities for Tong Tai and Aero Win
Very good diversification
The 3 months correlation between Tong and Aero is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Tong Tai Machine Tool and Aero Win Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aero Win Technology and Tong Tai 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 Tai Machine Tool are associated (or correlated) with Aero Win. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aero Win Technology has no effect on the direction of Tong Tai i.e., Tong Tai and Aero Win go up and down completely randomly.
Pair Corralation between Tong Tai and Aero Win
Assuming the 90 days trading horizon Tong Tai Machine Tool is expected to under-perform the Aero Win. In addition to that, Tong Tai is 1.61 times more volatile than Aero Win Technology. It trades about -0.07 of its total potential returns per unit of risk. Aero Win Technology is currently generating about 0.05 per unit of volatility. If you would invest 3,600 in Aero Win Technology on September 12, 2024 and sell it today you would earn a total of 170.00 from holding Aero Win Technology or generate 4.72% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Tong Tai Machine Tool vs. Aero Win Technology
Performance |
Timeline |
Tong Tai Machine |
Aero Win Technology |
Tong Tai and Aero Win Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Tong Tai and Aero Win
The main advantage of trading using opposite Tong Tai and Aero Win positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tong Tai position performs unexpectedly, Aero Win 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 Aero Win will offset losses from the drop in Aero Win's long position.Tong Tai vs. Yang Ming Marine | Tong Tai vs. Wan Hai Lines | Tong Tai vs. U Ming Marine Transport | Tong Tai vs. Taiwan Navigation Co |
Aero Win vs. CSBC Corp Taiwan | Aero Win vs. Tong Tai Machine Tool | Aero Win vs. Super Dragon Technology | Aero Win vs. Victory New Materials |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |