Correlation Between TCL Electronics and Sumco

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

By analyzing existing cross correlation between TCL Electronics Holdings and Sumco, you can compare the effects of market volatilities on TCL Electronics and Sumco 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 TCL Electronics with a short position of Sumco. Check out your portfolio center. Please also check ongoing floating volatility patterns of TCL Electronics and Sumco.

Diversification Opportunities for TCL Electronics and Sumco

0.24

Correlation Coefficient

TCL Electronics  Sumco

Modest diversification

The 3 months correlation between TCL and Sumco is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding TCL Electronics Holdings and Sumco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sumco and TCL Electronics 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 TCL Electronics Holdings are associated (or correlated) with Sumco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sumco has no effect on the direction of TCL Electronics i.e., TCL Electronics and Sumco go up and down completely randomly.

Pair Corralation between TCL Electronics and Sumco

Assuming the 90 days horizon TCL Electronics Holdings is expected to generate 0.9 times more return on investment than Sumco. However, TCL Electronics Holdings is 1.11 times less risky than Sumco. It trades about -0.16 of its potential returns per unit of risk. Sumco is currently generating about -0.23 per unit of risk. If you would invest  135.00  in TCL Electronics Holdings on August 15, 2025 and sell it today you would lose (28.00) from holding TCL Electronics Holdings or give up 20.74% of portfolio value over 90 days.

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

TCL Electronics Holdings  vs.  Sumco

TCL Electronics Holdings

Risk-Adjusted Performance

Weak

Over the last 90 days TCL Electronics Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's technical indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Sumco

Risk-Adjusted Performance

Weakest

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

Pair Trading with TCL Electronics and Sumco

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

The idea behind TCL Electronics Holdings and Sumco 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.