Correlation Between COMPUTER MODELLING and Li Ning

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

By analyzing existing cross correlation between COMPUTER MODELLING and Li Ning Company, you can compare the effects of market volatilities on COMPUTER MODELLING and Li Ning 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 COMPUTER MODELLING with a short position of Li Ning. Check out your portfolio center. Please also check ongoing floating volatility patterns of COMPUTER MODELLING and Li Ning.

Diversification Opportunities for COMPUTER MODELLING and Li Ning

0.5

Correlation Coefficient

COMPUTER MODELLING  Li Ning

Very weak diversification

The 3 months correlation between COMPUTER and LNLB is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding COMPUTER MODELLING and Li Ning Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Li Ning Company and COMPUTER MODELLING 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 COMPUTER MODELLING are associated (or correlated) with Li Ning. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Li Ning Company has no effect on the direction of COMPUTER MODELLING i.e., COMPUTER MODELLING and Li Ning go up and down completely randomly.

Pair Corralation between COMPUTER MODELLING and Li Ning

If you would invest  380.00  in COMPUTER MODELLING on October 8, 2024 and sell it today you would earn a total of  0.00  from holding COMPUTER MODELLING or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	93.75%
Values	Daily Returns

COMPUTER MODELLING  vs.  Li Ning Company

COMPUTER MODELLING

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days COMPUTER MODELLING has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound forward-looking indicators, COMPUTER MODELLING is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Li Ning Company

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with COMPUTER MODELLING and Li Ning

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

The idea behind COMPUTER MODELLING and Li Ning Company 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.