Correlation Between Li Peng and Taiwan Taffeta
Can any of the company-specific risk be diversified away by investing in both Li Peng and Taiwan Taffeta 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 Li Peng and Taiwan Taffeta into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Li Peng Enterprise and Taiwan Taffeta Fabric, you can compare the effects of market volatilities on Li Peng and Taiwan Taffeta 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 Li Peng with a short position of Taiwan Taffeta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Li Peng and Taiwan Taffeta.
Diversification Opportunities for Li Peng and Taiwan Taffeta
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between 1447 and Taiwan is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Li Peng Enterprise and Taiwan Taffeta Fabric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taiwan Taffeta Fabric and Li Peng 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 Li Peng Enterprise are associated (or correlated) with Taiwan Taffeta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taiwan Taffeta Fabric has no effect on the direction of Li Peng i.e., Li Peng and Taiwan Taffeta go up and down completely randomly.
Pair Corralation between Li Peng and Taiwan Taffeta
Assuming the 90 days trading horizon Li Peng Enterprise is expected to generate 1.23 times more return on investment than Taiwan Taffeta. However, Li Peng is 1.23 times more volatile than Taiwan Taffeta Fabric. It trades about 0.0 of its potential returns per unit of risk. Taiwan Taffeta Fabric is currently generating about -0.01 per unit of risk. If you would invest 772.00 in Li Peng Enterprise on September 14, 2024 and sell it today you would lose (21.00) from holding Li Peng Enterprise or give up 2.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Li Peng Enterprise vs. Taiwan Taffeta Fabric
Performance |
| Timeline |
| Li Peng Enterprise |
| Taiwan Taffeta Fabric |
Li Peng and Taiwan Taffeta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Li Peng and Taiwan Taffeta
The main advantage of trading using opposite Li Peng and Taiwan Taffeta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Li Peng position performs unexpectedly, Taiwan Taffeta 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 Taiwan Taffeta will offset losses from the drop in Taiwan Taffeta's long position.| Li Peng vs. Feng Tay Enterprises | Li Peng vs. Ruentex Development Co | Li Peng vs. WiseChip Semiconductor | Li Peng vs. Novatek Microelectronics Corp |
| Taiwan Taffeta vs. Feng Tay Enterprises | Taiwan Taffeta vs. Ruentex Development Co | Taiwan Taffeta vs. WiseChip Semiconductor | Taiwan Taffeta vs. Novatek Microelectronics Corp |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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