Correlation Between Lealea Enterprise and Ton Yi
Can any of the company-specific risk be diversified away by investing in both Lealea Enterprise and Ton Yi 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 Ton Yi 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 Ton Yi Industrial, you can compare the effects of market volatilities on Lealea Enterprise and Ton Yi 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 Ton Yi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lealea Enterprise and Ton Yi.
Diversification Opportunities for Lealea Enterprise and Ton Yi
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Lealea and Ton is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Lealea Enterprise Co and Ton Yi Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ton Yi Industrial 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 Ton Yi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ton Yi Industrial has no effect on the direction of Lealea Enterprise i.e., Lealea Enterprise and Ton Yi go up and down completely randomly.
Pair Corralation between Lealea Enterprise and Ton Yi
Assuming the 90 days trading horizon Lealea Enterprise Co is expected to generate 0.95 times more return on investment than Ton Yi. However, Lealea Enterprise Co is 1.06 times less risky than Ton Yi. It trades about -0.01 of its potential returns per unit of risk. Ton Yi Industrial is currently generating about -0.07 per unit of risk. If you would invest 928.00 in Lealea Enterprise Co on September 13, 2024 and sell it today you would lose (3.00) from holding Lealea Enterprise Co or give up 0.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lealea Enterprise Co vs. Ton Yi Industrial
Performance |
| Timeline |
| Lealea Enterprise |
| Ton Yi Industrial |
Lealea Enterprise and Ton Yi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lealea Enterprise and Ton Yi
The main advantage of trading using opposite Lealea Enterprise and Ton Yi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lealea Enterprise position performs unexpectedly, Ton Yi 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 Ton Yi will offset losses from the drop in Ton Yi's long position.| Lealea Enterprise vs. Li Peng Enterprise | Lealea Enterprise vs. Tainan Spinning Co | Lealea Enterprise vs. USI Corp | Lealea Enterprise vs. UPC Technology Corp |
| Ton Yi vs. Tainan Spinning Co | Ton Yi vs. Lealea Enterprise Co | Ton Yi vs. China Petrochemical Development | Ton Yi 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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