Correlation Between Lealea Enterprise and Sheng Yu
Can any of the company-specific risk be diversified away by investing in both Lealea Enterprise and Sheng Yu 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 Sheng Yu 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 Sheng Yu Steel, you can compare the effects of market volatilities on Lealea Enterprise and Sheng Yu 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 Sheng Yu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lealea Enterprise and Sheng Yu.
Diversification Opportunities for Lealea Enterprise and Sheng Yu
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Lealea and Sheng is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Lealea Enterprise Co and Sheng Yu Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sheng Yu Steel 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 Sheng Yu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sheng Yu Steel has no effect on the direction of Lealea Enterprise i.e., Lealea Enterprise and Sheng Yu go up and down completely randomly.
Pair Corralation between Lealea Enterprise and Sheng Yu
Assuming the 90 days trading horizon Lealea Enterprise Co is expected to under-perform the Sheng Yu. In addition to that, Lealea Enterprise is 1.02 times more volatile than Sheng Yu Steel. It trades about -0.03 of its total potential returns per unit of risk. Sheng Yu Steel is currently generating about 0.02 per unit of volatility. If you would invest 2,360 in Sheng Yu Steel on September 12, 2024 and sell it today you would earn a total of 125.00 from holding Sheng Yu Steel or generate 5.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lealea Enterprise Co vs. Sheng Yu Steel
Performance |
| Timeline |
| Lealea Enterprise |
| Sheng Yu Steel |
Lealea Enterprise and Sheng Yu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lealea Enterprise and Sheng Yu
The main advantage of trading using opposite Lealea Enterprise and Sheng Yu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lealea Enterprise position performs unexpectedly, Sheng Yu 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 Sheng Yu will offset losses from the drop in Sheng Yu'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 |
| Sheng Yu vs. Tainan Spinning Co | Sheng Yu vs. Lealea Enterprise Co | Sheng Yu vs. China Petrochemical Development | Sheng Yu 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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