Correlation Between Oriental Union and Lealea Enterprise
Can any of the company-specific risk be diversified away by investing in both Oriental Union and Lealea 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 Oriental Union and Lealea Enterprise into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oriental Union Chemical and Lealea Enterprise Co, you can compare the effects of market volatilities on Oriental Union and Lealea 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 Oriental Union with a short position of Lealea Enterprise. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oriental Union and Lealea Enterprise.
Diversification Opportunities for Oriental Union and Lealea Enterprise
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Oriental and Lealea is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Oriental Union Chemical and Lealea Enterprise Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lealea Enterprise and Oriental Union 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 Oriental Union Chemical are associated (or correlated) with Lealea Enterprise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lealea Enterprise has no effect on the direction of Oriental Union i.e., Oriental Union and Lealea Enterprise go up and down completely randomly.
Pair Corralation between Oriental Union and Lealea Enterprise
Assuming the 90 days trading horizon Oriental Union Chemical is expected to under-perform the Lealea Enterprise. In addition to that, Oriental Union is 1.03 times more volatile than Lealea Enterprise Co. It trades about -0.08 of its total potential returns per unit of risk. Lealea Enterprise Co is currently generating about -0.03 per unit of volatility. If you would invest 1,100 in Lealea Enterprise Co on September 1, 2024 and sell it today you would lose (182.00) from holding Lealea Enterprise Co or give up 16.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
Oriental Union Chemical vs. Lealea Enterprise Co
Performance |
| Timeline |
| Oriental Union Chemical |
| Lealea Enterprise |
Oriental Union and Lealea Enterprise Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oriental Union and Lealea Enterprise
The main advantage of trading using opposite Oriental Union and Lealea Enterprise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oriental Union position performs unexpectedly, Lealea 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 Lealea Enterprise will offset losses from the drop in Lealea Enterprise's long position.| Oriental Union vs. Basso Industry Corp | Oriental Union vs. Chung Hsin Electric Machinery | Oriental Union vs. TYC Brother Industrial | Oriental Union vs. TECO Electric Machinery |
| Lealea Enterprise vs. Li Peng Enterprise | Lealea Enterprise vs. Tainan Spinning Co | Lealea Enterprise vs. USI Corp | Lealea Enterprise vs. UPC Technology Corp |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Stocks Directory Find actively traded stocks across global markets |