Correlation Between Lealea Enterprise and Ta Chen
Can any of the company-specific risk be diversified away by investing in both Lealea Enterprise and Ta Chen 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 Lealea Enterprise and Ta Chen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lealea Enterprise Co and Ta Chen Stainless, you can compare the effects of market volatilities on Lealea Enterprise and Ta Chen 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 Lealea Enterprise with a short position of Ta Chen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lealea Enterprise and Ta Chen.
Diversification Opportunities for Lealea Enterprise and Ta Chen
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lealea and 2027 is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Lealea Enterprise Co and Ta Chen Stainless in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ta Chen Stainless and Lealea Enterprise 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 Lealea Enterprise Co are associated (or correlated) with Ta Chen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ta Chen Stainless has no effect on the direction of Lealea Enterprise i.e., Lealea Enterprise and Ta Chen go up and down completely randomly.
Pair Corralation between Lealea Enterprise and Ta Chen
Assuming the 90 days trading horizon Lealea Enterprise Co is expected to generate 0.53 times more return on investment than Ta Chen. However, Lealea Enterprise Co is 1.87 times less risky than Ta Chen. It trades about 0.04 of its potential returns per unit of risk. Ta Chen Stainless is currently generating about -0.14 per unit of risk. If you would invest 933.00 in Lealea Enterprise Co on September 12, 2024 and sell it today you would earn a total of 7.00 from holding Lealea Enterprise Co or generate 0.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lealea Enterprise Co vs. Ta Chen Stainless
Performance |
| Timeline |
| Lealea Enterprise |
| Ta Chen Stainless |
Lealea Enterprise and Ta Chen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lealea Enterprise and Ta Chen
The main advantage of trading using opposite Lealea Enterprise and Ta Chen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lealea Enterprise position performs unexpectedly, Ta Chen 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 Ta Chen will offset losses from the drop in Ta Chen's long position.| Lealea Enterprise vs. Feng Tay Enterprises | Lealea Enterprise vs. Ruentex Development Co | Lealea Enterprise vs. WiseChip Semiconductor | Lealea Enterprise vs. Novatek Microelectronics Corp |
| Ta Chen vs. Tainan Spinning Co | Ta Chen vs. Lealea Enterprise Co | Ta Chen vs. China Petrochemical Development | Ta Chen vs. Ruentex Development 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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