Correlation Between Wellell and Luo Lih
Can any of the company-specific risk be diversified away by investing in both Wellell and Luo Lih 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 Wellell and Luo Lih into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wellell and Luo Lih Fen, you can compare the effects of market volatilities on Wellell and Luo Lih 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 Wellell with a short position of Luo Lih. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wellell and Luo Lih.
Diversification Opportunities for Wellell and Luo Lih
Very weak diversification
The 3 months correlation between Wellell and Luo is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Wellell and Luo Lih Fen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Luo Lih Fen and Wellell 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 Wellell are associated (or correlated) with Luo Lih. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Luo Lih Fen has no effect on the direction of Wellell i.e., Wellell and Luo Lih go up and down completely randomly.
Pair Corralation between Wellell and Luo Lih
Assuming the 90 days trading horizon Wellell is expected to generate 0.59 times more return on investment than Luo Lih. However, Wellell is 1.69 times less risky than Luo Lih. It trades about 0.02 of its potential returns per unit of risk. Luo Lih Fen is currently generating about -0.05 per unit of risk. If you would invest 2,475 in Wellell on December 5, 2024 and sell it today you would earn a total of 35.00 from holding Wellell or generate 1.41% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Wellell vs. Luo Lih Fen
Performance |
Timeline |
Wellell |
Luo Lih Fen |
Wellell and Luo Lih Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Wellell and Luo Lih
The main advantage of trading using opposite Wellell and Luo Lih positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wellell position performs unexpectedly, Luo Lih 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 Luo Lih will offset losses from the drop in Luo Lih's long position.Wellell vs. Sinphar Pharmaceutical Co | Wellell vs. Excelsior Medical Co | Wellell vs. Abnova Taiwan Corp | Wellell vs. Phytohealth Corp |
Luo Lih vs. Jourdeness Group | Luo Lih vs. Formosa Laboratories | Luo Lih vs. Wellell | Luo Lih vs. Chlitina Holding |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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