Correlation Between Li Peng and Honmyue Enterprise
Can any of the company-specific risk be diversified away by investing in both Li Peng and Honmyue Enterprise 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 Honmyue Enterprise 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 Honmyue Enterprise Co, you can compare the effects of market volatilities on Li Peng and Honmyue Enterprise 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 Honmyue Enterprise. Check out your portfolio center. Please also check ongoing floating volatility patterns of Li Peng and Honmyue Enterprise.
Diversification Opportunities for Li Peng and Honmyue Enterprise
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 1447 and Honmyue is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Li Peng Enterprise and Honmyue Enterprise Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Honmyue Enterprise 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 Honmyue Enterprise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Honmyue Enterprise has no effect on the direction of Li Peng i.e., Li Peng and Honmyue Enterprise go up and down completely randomly.
Pair Corralation between Li Peng and Honmyue Enterprise
Assuming the 90 days trading horizon Li Peng is expected to generate 5.7 times less return on investment than Honmyue Enterprise. In addition to that, Li Peng is 1.19 times more volatile than Honmyue Enterprise Co. It trades about 0.0 of its total potential returns per unit of risk. Honmyue Enterprise Co is currently generating about 0.03 per unit of volatility. If you would invest 1,165 in Honmyue Enterprise Co on September 14, 2024 and sell it today you would earn a total of 120.00 from holding Honmyue Enterprise Co or generate 10.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Li Peng Enterprise vs. Honmyue Enterprise Co
Performance |
| Timeline |
| Li Peng Enterprise |
| Honmyue Enterprise |
Li Peng and Honmyue Enterprise Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Li Peng and Honmyue Enterprise
The main advantage of trading using opposite Li Peng and Honmyue Enterprise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Li Peng position performs unexpectedly, Honmyue Enterprise 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 Honmyue Enterprise will offset losses from the drop in Honmyue Enterprise'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 |
| Honmyue Enterprise vs. Tex Ray Industrial Co | Honmyue Enterprise vs. Wisher Industrial Co | Honmyue Enterprise vs. Li Peng Enterprise | Honmyue Enterprise vs. Tah Tong Textile |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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