Correlation Between Hold Key and Lee Chi
Can any of the company-specific risk be diversified away by investing in both Hold Key and Lee Chi 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 Hold Key and Lee Chi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hold Key Electric Wire and Lee Chi Enterprises, you can compare the effects of market volatilities on Hold Key and Lee Chi 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 Hold Key with a short position of Lee Chi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hold Key and Lee Chi.
Diversification Opportunities for Hold Key and Lee Chi
Very poor diversification
The 3 months correlation between Hold and Lee is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Hold Key Electric Wire and Lee Chi Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lee Chi Enterprises and Hold Key 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 Hold Key Electric Wire are associated (or correlated) with Lee Chi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lee Chi Enterprises has no effect on the direction of Hold Key i.e., Hold Key and Lee Chi go up and down completely randomly.
Pair Corralation between Hold Key and Lee Chi
Assuming the 90 days trading horizon Hold Key Electric Wire is expected to generate 1.13 times more return on investment than Lee Chi. However, Hold Key is 1.13 times more volatile than Lee Chi Enterprises. It trades about -0.23 of its potential returns per unit of risk. Lee Chi Enterprises is currently generating about -0.27 per unit of risk. If you would invest 4,570 in Hold Key Electric Wire on January 14, 2025 and sell it today you would lose (1,040) from holding Hold Key Electric Wire or give up 22.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hold Key Electric Wire vs. Lee Chi Enterprises
Performance |
| Timeline |
| Hold Key Electric |
| Lee Chi Enterprises |
Hold Key and Lee Chi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hold Key and Lee Chi
The main advantage of trading using opposite Hold Key and Lee Chi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hold Key position performs unexpectedly, Lee Chi 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 Lee Chi will offset losses from the drop in Lee Chi's long position.| Hold Key vs. Huaku Development Co | Hold Key vs. Highwealth Construction Corp | Hold Key vs. Kindom Construction Corp | Hold Key vs. Kedge Construction Co |
| Lee Chi vs. Kerry TJ Logistics | Lee Chi vs. China Container Terminal | Lee Chi vs. Eastern Media International | Lee Chi vs. Taiwan Navigation Co |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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