Correlation Between De Licacy and APEX International
Can any of the company-specific risk be diversified away by investing in both De Licacy and APEX International 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 APEX International 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 APEX International Financial, you can compare the effects of market volatilities on De Licacy and APEX International 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 APEX International. Check out your portfolio center. Please also check ongoing floating volatility patterns of De Licacy and APEX International.
Diversification Opportunities for De Licacy and APEX International
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 1464 and APEX is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding De Licacy Industrial and APEX International Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APEX International 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 APEX International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of APEX International has no effect on the direction of De Licacy i.e., De Licacy and APEX International go up and down completely randomly.
Pair Corralation between De Licacy and APEX International
Assuming the 90 days trading horizon De Licacy Industrial is expected to generate 0.4 times more return on investment than APEX International. However, De Licacy Industrial is 2.49 times less risky than APEX International. It trades about 0.06 of its potential returns per unit of risk. APEX International Financial is currently generating about -0.03 per unit of risk. If you would invest 1,325 in De Licacy Industrial on September 4, 2024 and sell it today you would earn a total of 290.00 from holding De Licacy Industrial or generate 21.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
De Licacy Industrial vs. APEX International Financial
Performance |
| Timeline |
| De Licacy Industrial |
| APEX International |
De Licacy and APEX International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with De Licacy and APEX International
The main advantage of trading using opposite De Licacy and APEX International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if De Licacy position performs unexpectedly, APEX International 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 APEX International will offset losses from the drop in APEX International's long position.| De Licacy vs. Tainan Enterprises Co | De Licacy vs. Nien Hsing Textile | De Licacy vs. Wisher Industrial Co | De Licacy vs. Tex Ray Industrial Co |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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