Correlation Between Li Peng and Wisher Industrial
Can any of the company-specific risk be diversified away by investing in both Li Peng and Wisher Industrial 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 Wisher Industrial 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 Wisher Industrial Co, you can compare the effects of market volatilities on Li Peng and Wisher Industrial 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 Wisher Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Li Peng and Wisher Industrial.
Diversification Opportunities for Li Peng and Wisher Industrial
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 1447 and Wisher is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Li Peng Enterprise and Wisher Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wisher Industrial 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 Wisher Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wisher Industrial has no effect on the direction of Li Peng i.e., Li Peng and Wisher Industrial go up and down completely randomly.
Pair Corralation between Li Peng and Wisher Industrial
Assuming the 90 days trading horizon Li Peng Enterprise is expected to generate 1.16 times more return on investment than Wisher Industrial. However, Li Peng is 1.16 times more volatile than Wisher Industrial Co. It trades about -0.03 of its potential returns per unit of risk. Wisher Industrial Co is currently generating about -0.07 per unit of risk. If you would invest 725.00 in Li Peng Enterprise on October 20, 2024 and sell it today you would lose (8.00) from holding Li Peng Enterprise or give up 1.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Li Peng Enterprise vs. Wisher Industrial Co
Performance |
| Timeline |
| Li Peng Enterprise |
| Wisher Industrial |
Li Peng and Wisher Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Li Peng and Wisher Industrial
The main advantage of trading using opposite Li Peng and Wisher Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Li Peng position performs unexpectedly, Wisher Industrial 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 Wisher Industrial will offset losses from the drop in Wisher Industrial's long position.| Li Peng vs. Taiwan Speciality Chemicals | Li Peng vs. U Tech Media Corp | Li Peng vs. Feng Ching Metal | Li Peng vs. MediaTek |
| Wisher Industrial vs. Carnival Industrial Corp | Wisher Industrial vs. De Licacy Industrial | Wisher Industrial vs. Tex Ray Industrial Co | Wisher Industrial vs. Reward Wool Industry |
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 CEOs Directory module to screen CEOs from public companies around the world.
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