Correlation Between TOREX SEMICONDUCTOR and PPHE HOTEL

Can any of the company-specific risk be diversified away by investing in both TOREX SEMICONDUCTOR and PPHE HOTEL 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 TOREX SEMICONDUCTOR and PPHE HOTEL into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between TOREX SEMICONDUCTOR LTD and PPHE HOTEL GROUP, you can compare the effects of market volatilities on TOREX SEMICONDUCTOR and PPHE HOTEL 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 TOREX SEMICONDUCTOR with a short position of PPHE HOTEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of TOREX SEMICONDUCTOR and PPHE HOTEL.

Diversification Opportunities for TOREX SEMICONDUCTOR and PPHE HOTEL

-0.6

Correlation Coefficient

TOREX SEMICONDUCTOR  PPHE HOTEL

Excellent diversification

The 3 months correlation between TOREX and PPHE is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding TOREX SEMICONDUCTOR LTD and PPHE HOTEL GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PPHE HOTEL GROUP and TOREX SEMICONDUCTOR 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 TOREX SEMICONDUCTOR LTD are associated (or correlated) with PPHE HOTEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PPHE HOTEL GROUP has no effect on the direction of TOREX SEMICONDUCTOR i.e., TOREX SEMICONDUCTOR and PPHE HOTEL go up and down completely randomly.

Pair Corralation between TOREX SEMICONDUCTOR and PPHE HOTEL

Assuming the 90 days horizon TOREX SEMICONDUCTOR LTD is expected to under-perform the PPHE HOTEL. In addition to that, TOREX SEMICONDUCTOR is 1.23 times more volatile than PPHE HOTEL GROUP. It trades about -0.25 of its total potential returns per unit of risk. PPHE HOTEL GROUP is currently generating about 0.11 per unit of volatility. If you would invest  1,470  in PPHE HOTEL GROUP on September 29, 2024 and sell it today you would earn a total of  150.00  from holding PPHE HOTEL GROUP or generate 10.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

TOREX SEMICONDUCTOR LTD  vs.  PPHE HOTEL GROUP

TOREX SEMICONDUCTOR LTD

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TOREX SEMICONDUCTOR LTD has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

PPHE HOTEL GROUP

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PPHE HOTEL GROUP are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, PPHE HOTEL may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with TOREX SEMICONDUCTOR and PPHE HOTEL

The main advantage of trading using opposite TOREX SEMICONDUCTOR and PPHE HOTEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TOREX SEMICONDUCTOR position performs unexpectedly, PPHE HOTEL 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 PPHE HOTEL will offset losses from the drop in PPHE HOTEL's long position.

The idea behind TOREX SEMICONDUCTOR LTD and PPHE HOTEL GROUP pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.