Correlation Between Luo Lih and San Neng
Can any of the company-specific risk be diversified away by investing in both Luo Lih and San Neng 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 Luo Lih and San Neng into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Luo Lih Fen and San Neng Group, you can compare the effects of market volatilities on Luo Lih and San Neng 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 Luo Lih with a short position of San Neng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luo Lih and San Neng.
Diversification Opportunities for Luo Lih and San Neng
Good diversification
The 3 months correlation between Luo and San is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Luo Lih Fen and San Neng Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on San Neng Group and Luo Lih 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 Luo Lih Fen are associated (or correlated) with San Neng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of San Neng Group has no effect on the direction of Luo Lih i.e., Luo Lih and San Neng go up and down completely randomly.
Pair Corralation between Luo Lih and San Neng
Assuming the 90 days trading horizon Luo Lih Fen is expected to under-perform the San Neng. In addition to that, Luo Lih is 3.81 times more volatile than San Neng Group. It trades about -0.05 of its total potential returns per unit of risk. San Neng Group is currently generating about 0.14 per unit of volatility. If you would invest 4,130 in San Neng Group on December 5, 2024 and sell it today you would earn a total of 235.00 from holding San Neng Group or generate 5.69% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 98.21% |
Values | Daily Returns |
Luo Lih Fen vs. San Neng Group
Performance |
Timeline |
Luo Lih Fen |
San Neng Group |
Luo Lih and San Neng Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Luo Lih and San Neng
The main advantage of trading using opposite Luo Lih and San Neng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luo Lih position performs unexpectedly, San Neng 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 San Neng will offset losses from the drop in San Neng's long position.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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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