Correlation Between Healthconn Corp and Li Kang
Can any of the company-specific risk be diversified away by investing in both Healthconn Corp and Li Kang 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 Healthconn Corp and Li Kang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Healthconn Corp and Li Kang Biomedical, you can compare the effects of market volatilities on Healthconn Corp and Li Kang 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 Healthconn Corp with a short position of Li Kang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Healthconn Corp and Li Kang.
Diversification Opportunities for Healthconn Corp and Li Kang
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Healthconn and 6242 is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Healthconn Corp and Li Kang Biomedical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Li Kang Biomedical and Healthconn Corp 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 Healthconn Corp are associated (or correlated) with Li Kang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Li Kang Biomedical has no effect on the direction of Healthconn Corp i.e., Healthconn Corp and Li Kang go up and down completely randomly.
Pair Corralation between Healthconn Corp and Li Kang
Assuming the 90 days trading horizon Healthconn Corp is expected to under-perform the Li Kang. In addition to that, Healthconn Corp is 1.44 times more volatile than Li Kang Biomedical. It trades about -0.04 of its total potential returns per unit of risk. Li Kang Biomedical is currently generating about -0.01 per unit of volatility. If you would invest 4,764 in Li Kang Biomedical on October 5, 2024 and sell it today you would lose (529.00) from holding Li Kang Biomedical or give up 11.1% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Healthconn Corp vs. Li Kang Biomedical
Performance |
Timeline |
Healthconn Corp |
Li Kang Biomedical |
Healthconn Corp and Li Kang Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Healthconn Corp and Li Kang
The main advantage of trading using opposite Healthconn Corp and Li Kang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Healthconn Corp position performs unexpectedly, Li Kang 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 Kang will offset losses from the drop in Li Kang's long position.Healthconn Corp vs. YuantaP shares Taiwan Electronics | Healthconn Corp vs. YuantaP shares Taiwan Mid Cap | Healthconn Corp vs. Fubon MSCI Taiwan | Healthconn Corp vs. YuantaP shares Taiwan Top |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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