Correlation Between Lungyen Life and Taiwan Hopax
Can any of the company-specific risk be diversified away by investing in both Lungyen Life and Taiwan Hopax 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 Lungyen Life and Taiwan Hopax into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lungyen Life Service and Taiwan Hopax Chemsistry, you can compare the effects of market volatilities on Lungyen Life and Taiwan Hopax 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 Lungyen Life with a short position of Taiwan Hopax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lungyen Life and Taiwan Hopax.
Diversification Opportunities for Lungyen Life and Taiwan Hopax
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lungyen and Taiwan is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Lungyen Life Service and Taiwan Hopax Chemsistry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taiwan Hopax Chemsistry and Lungyen Life 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 Lungyen Life Service are associated (or correlated) with Taiwan Hopax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taiwan Hopax Chemsistry has no effect on the direction of Lungyen Life i.e., Lungyen Life and Taiwan Hopax go up and down completely randomly.
Pair Corralation between Lungyen Life and Taiwan Hopax
Assuming the 90 days trading horizon Lungyen Life Service is expected to generate 2.41 times more return on investment than Taiwan Hopax. However, Lungyen Life is 2.41 times more volatile than Taiwan Hopax Chemsistry. It trades about 0.06 of its potential returns per unit of risk. Taiwan Hopax Chemsistry is currently generating about -0.49 per unit of risk. If you would invest 5,240 in Lungyen Life Service on September 26, 2024 and sell it today you would earn a total of 130.00 from holding Lungyen Life Service or generate 2.48% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Lungyen Life Service vs. Taiwan Hopax Chemsistry
Performance |
Timeline |
Lungyen Life Service |
Taiwan Hopax Chemsistry |
Lungyen Life and Taiwan Hopax Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Lungyen Life and Taiwan Hopax
The main advantage of trading using opposite Lungyen Life and Taiwan Hopax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lungyen Life position performs unexpectedly, Taiwan Hopax 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 Taiwan Hopax will offset losses from the drop in Taiwan Hopax's long position.Lungyen Life vs. Da Lue International | Lungyen Life vs. Lian Hwa Foods | Lungyen Life vs. Wiwynn Corp | Lungyen Life vs. Asmedia Technology |
Taiwan Hopax vs. Mechema Chemicals Int | Taiwan Hopax vs. Coremax Corp | Taiwan Hopax vs. China Steel Chemical | Taiwan Hopax vs. Wafer Works |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |