Correlation Between Chlitina Holding and Luo Lih
Can any of the company-specific risk be diversified away by investing in both Chlitina Holding 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 Chlitina Holding and Luo Lih into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chlitina Holding and Luo Lih Fen, you can compare the effects of market volatilities on Chlitina Holding 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 Chlitina Holding with a short position of Luo Lih. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chlitina Holding and Luo Lih.
Diversification Opportunities for Chlitina Holding and Luo Lih
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chlitina and Luo is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Chlitina Holding 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 Chlitina 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 Chlitina Holding 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 Chlitina Holding i.e., Chlitina Holding and Luo Lih go up and down completely randomly.
Pair Corralation between Chlitina Holding and Luo Lih
Assuming the 90 days trading horizon Chlitina Holding is expected to generate 0.75 times more return on investment than Luo Lih. However, Chlitina Holding is 1.34 times less risky than Luo Lih. It trades about 0.03 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 11,650 in Chlitina Holding on December 5, 2024 and sell it today you would earn a total of 300.00 from holding Chlitina Holding or generate 2.58% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Chlitina Holding vs. Luo Lih Fen
Performance |
Timeline |
Chlitina Holding |
Luo Lih Fen |
Chlitina Holding and Luo Lih Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Chlitina Holding and Luo Lih
The main advantage of trading using opposite Chlitina Holding and Luo Lih positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chlitina Holding 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.Chlitina Holding vs. Grape King Bio | Chlitina Holding vs. BizLink Holding | Chlitina Holding vs. Gourmet Master Co | Chlitina Holding vs. Merida Industry Co |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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