Correlation Between De Licacy and Hsing Ta
Can any of the company-specific risk be diversified away by investing in both De Licacy and Hsing Ta 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 De Licacy and Hsing Ta into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between De Licacy Industrial and Hsing Ta Cement, you can compare the effects of market volatilities on De Licacy and Hsing Ta 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 De Licacy with a short position of Hsing Ta. Check out your portfolio center. Please also check ongoing floating volatility patterns of De Licacy and Hsing Ta.
Diversification Opportunities for De Licacy and Hsing Ta
Modest diversification
The 3 months correlation between 1464 and Hsing is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding De Licacy Industrial and Hsing Ta Cement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hsing Ta Cement and De Licacy 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 De Licacy Industrial are associated (or correlated) with Hsing Ta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hsing Ta Cement has no effect on the direction of De Licacy i.e., De Licacy and Hsing Ta go up and down completely randomly.
Pair Corralation between De Licacy and Hsing Ta
Assuming the 90 days trading horizon De Licacy Industrial is expected to generate 1.49 times more return on investment than Hsing Ta. However, De Licacy is 1.49 times more volatile than Hsing Ta Cement. It trades about 0.05 of its potential returns per unit of risk. Hsing Ta Cement is currently generating about 0.01 per unit of risk. If you would invest 1,350 in De Licacy Industrial on August 29, 2024 and sell it today you would earn a total of 235.00 from holding De Licacy Industrial or generate 17.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
De Licacy Industrial vs. Hsing Ta Cement
Performance |
| Timeline |
| De Licacy Industrial |
| Hsing Ta Cement |
De Licacy and Hsing Ta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with De Licacy and Hsing Ta
The main advantage of trading using opposite De Licacy and Hsing Ta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if De Licacy position performs unexpectedly, Hsing Ta 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 Hsing Ta will offset losses from the drop in Hsing Ta's long position.| De Licacy vs. Yulon Finance Corp | De Licacy vs. Taiwan Secom Co | De Licacy vs. Pou Chen Corp | De Licacy vs. Great Wall Enterprise |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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