Correlation Between First Pacific and Tingyi Holding

Can any of the company-specific risk be diversified away by investing in both First Pacific and Tingyi Holding 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 First Pacific and Tingyi Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between First Pacific and Tingyi Holding Corp, you can compare the effects of market volatilities on First Pacific and Tingyi Holding 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 First Pacific with a short position of Tingyi Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Pacific and Tingyi Holding.

Diversification Opportunities for First Pacific and Tingyi Holding

-0.54

Correlation Coefficient

First Pacific  Tingyi Holding

Excellent diversification

The 3 months correlation between First and Tingyi is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding First Pacific and Tingyi Holding Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tingyi Holding Corp and First Pacific 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 First Pacific are associated (or correlated) with Tingyi Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tingyi Holding Corp has no effect on the direction of First Pacific i.e., First Pacific and Tingyi Holding go up and down completely randomly.

Pair Corralation between First Pacific and Tingyi Holding

If you would invest  53.00  in First Pacific on September 4, 2024 and sell it today you would earn a total of  5.00  from holding First Pacific or generate 9.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.64%
Values	Daily Returns

First Pacific  vs.  Tingyi Holding Corp

First Pacific

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in First Pacific are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain technical and fundamental indicators, First Pacific reported solid returns over the last few months and may actually be approaching a breakup point.

Tingyi Holding Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tingyi Holding Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable primary indicators, Tingyi Holding is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with First Pacific and Tingyi Holding

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

The idea behind First Pacific and Tingyi Holding Corp 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.