Correlation Between Hi Lai and De Licacy
Can any of the company-specific risk be diversified away by investing in both Hi Lai and De Licacy 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 Hi Lai and De Licacy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hi Lai Foods Co and De Licacy Industrial, you can compare the effects of market volatilities on Hi Lai and De Licacy 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 Hi Lai with a short position of De Licacy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hi Lai and De Licacy.
Diversification Opportunities for Hi Lai and De Licacy
Very weak diversification
The 3 months correlation between 1268 and 1464 is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Hi Lai Foods Co and De Licacy Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on De Licacy Industrial and Hi Lai 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 Hi Lai Foods Co are associated (or correlated) with De Licacy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of De Licacy Industrial has no effect on the direction of Hi Lai i.e., Hi Lai and De Licacy go up and down completely randomly.
Pair Corralation between Hi Lai and De Licacy
Assuming the 90 days trading horizon Hi Lai Foods Co is expected to generate 0.17 times more return on investment than De Licacy. However, Hi Lai Foods Co is 5.76 times less risky than De Licacy. It trades about -0.32 of its potential returns per unit of risk. De Licacy Industrial is currently generating about -0.08 per unit of risk. If you would invest 15,450 in Hi Lai Foods Co on August 30, 2024 and sell it today you would lose (550.00) from holding Hi Lai Foods Co or give up 3.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Hi Lai Foods Co vs. De Licacy Industrial
Performance |
| Timeline |
| Hi Lai Foods |
| De Licacy Industrial |
Hi Lai and De Licacy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hi Lai and De Licacy
The main advantage of trading using opposite Hi Lai and De Licacy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hi Lai position performs unexpectedly, De Licacy 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 De Licacy will offset losses from the drop in De Licacy's long position.| Hi Lai vs. Wowprime Corp | Hi Lai vs. Louisa Professional Coffee | Hi Lai vs. An Shin Food Services | Hi Lai vs. New Palace International |
| De Licacy vs. Tainan Enterprises Co | De Licacy vs. Nien Hsing Textile | De Licacy vs. Wisher Industrial Co | De Licacy vs. Tex Ray Industrial Co |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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