Correlation Between Asia Polymer and Li Peng
Can any of the company-specific risk be diversified away by investing in both Asia Polymer and Li Peng 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 Asia Polymer and Li Peng into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asia Polymer Corp and Li Peng Enterprise, you can compare the effects of market volatilities on Asia Polymer and Li Peng 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 Asia Polymer with a short position of Li Peng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Polymer and Li Peng.
Diversification Opportunities for Asia Polymer and Li Peng
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Asia and 1447 is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Asia Polymer Corp and Li Peng Enterprise in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Li Peng Enterprise and Asia Polymer 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 Asia Polymer Corp are associated (or correlated) with Li Peng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Li Peng Enterprise has no effect on the direction of Asia Polymer i.e., Asia Polymer and Li Peng go up and down completely randomly.
Pair Corralation between Asia Polymer and Li Peng
Assuming the 90 days trading horizon Asia Polymer Corp is expected to under-perform the Li Peng. But the stock apears to be less risky and, when comparing its historical volatility, Asia Polymer Corp is 1.03 times less risky than Li Peng. The stock trades about -0.04 of its potential returns per unit of risk. The Li Peng Enterprise is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 792.00 in Li Peng Enterprise on September 3, 2024 and sell it today you would lose (16.00) from holding Li Peng Enterprise or give up 2.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asia Polymer Corp vs. Li Peng Enterprise
Performance |
| Timeline |
| Asia Polymer Corp |
| Li Peng Enterprise |
Asia Polymer and Li Peng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia Polymer and Li Peng
The main advantage of trading using opposite Asia Polymer and Li Peng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Polymer position performs unexpectedly, Li Peng 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 Peng will offset losses from the drop in Li Peng's long position.| Asia Polymer vs. USI Corp | Asia Polymer vs. Taiwan Styrene Monomer | Asia Polymer vs. UPC Technology Corp | Asia Polymer vs. Grand Pacific Petrochemical |
| Li Peng vs. China Mobile | Li Peng vs. Shan Loong Transportation Co | Li Peng vs. Tainet Communication System | Li Peng vs. China Metal Products |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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