Correlation Between Li Peng and Tainan Spinning
Can any of the company-specific risk be diversified away by investing in both Li Peng and Tainan Spinning 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 Li Peng and Tainan Spinning into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Li Peng Enterprise and Tainan Spinning Co, you can compare the effects of market volatilities on Li Peng and Tainan Spinning 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 Li Peng with a short position of Tainan Spinning. Check out your portfolio center. Please also check ongoing floating volatility patterns of Li Peng and Tainan Spinning.
Diversification Opportunities for Li Peng and Tainan Spinning
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 1447 and Tainan is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Li Peng Enterprise and Tainan Spinning Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tainan Spinning and Li Peng 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 Li Peng Enterprise are associated (or correlated) with Tainan Spinning. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tainan Spinning has no effect on the direction of Li Peng i.e., Li Peng and Tainan Spinning go up and down completely randomly.
Pair Corralation between Li Peng and Tainan Spinning
Assuming the 90 days trading horizon Li Peng Enterprise is expected to generate 0.93 times more return on investment than Tainan Spinning. However, Li Peng Enterprise is 1.07 times less risky than Tainan Spinning. It trades about 0.0 of its potential returns per unit of risk. Tainan Spinning Co is currently generating about -0.01 per unit of risk. If you would invest 713.00 in Li Peng Enterprise on December 30, 2024 and sell it today you would lose (3.00) from holding Li Peng Enterprise or give up 0.42% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Li Peng Enterprise vs. Tainan Spinning Co
Performance |
Timeline |
Li Peng Enterprise |
Tainan Spinning |
Li Peng and Tainan Spinning Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Li Peng and Tainan Spinning
The main advantage of trading using opposite Li Peng and Tainan Spinning positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Li Peng position performs unexpectedly, Tainan Spinning 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 Tainan Spinning will offset losses from the drop in Tainan Spinning's long position.Li Peng vs. Tainet Communication System | Li Peng vs. Mobiletron Electronics Co | Li Peng vs. Pacific Hospital Supply | Li Peng vs. Johnson Health Tech |
Tainan Spinning vs. Lealea Enterprise Co | Tainan Spinning vs. China Petrochemical Development | Tainan Spinning vs. Li Peng Enterprise | Tainan Spinning vs. Oriental Union Chemical |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
Commodity Directory Find actively traded commodities issued by global exchanges | |
Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |