Correlation Between Tingyi Holding and First Pacific

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

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

Diversification Opportunities for Tingyi Holding and First Pacific

-0.54

Correlation Coefficient

Tingyi Holding  First Pacific

Excellent diversification

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

Pair Corralation between Tingyi Holding and First Pacific

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

Tingyi Holding Corp  vs.  First Pacific

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.

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.

Pair Trading with Tingyi Holding and First Pacific

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

The idea behind Tingyi Holding Corp and First Pacific 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.