Correlation Between International CSRC and Landis Taipei
Can any of the company-specific risk be diversified away by investing in both International CSRC and Landis Taipei 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 International CSRC and Landis Taipei into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International CSRC Investment and Landis Taipei Hotel, you can compare the effects of market volatilities on International CSRC and Landis Taipei 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 International CSRC with a short position of Landis Taipei. Check out your portfolio center. Please also check ongoing floating volatility patterns of International CSRC and Landis Taipei.
Diversification Opportunities for International CSRC and Landis Taipei
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between International and Landis is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding International CSRC Investment and Landis Taipei Hotel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Landis Taipei Hotel and International CSRC 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 International CSRC Investment are associated (or correlated) with Landis Taipei. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Landis Taipei Hotel has no effect on the direction of International CSRC i.e., International CSRC and Landis Taipei go up and down completely randomly.
Pair Corralation between International CSRC and Landis Taipei
Assuming the 90 days trading horizon International CSRC Investment is expected to generate 0.93 times more return on investment than Landis Taipei. However, International CSRC Investment is 1.08 times less risky than Landis Taipei. It trades about -0.07 of its potential returns per unit of risk. Landis Taipei Hotel is currently generating about -0.11 per unit of risk. If you would invest 1,755 in International CSRC Investment on August 25, 2024 and sell it today you would lose (205.00) from holding International CSRC Investment or give up 11.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.22% |
| Values | Daily Returns |
International CSRC Investment vs. Landis Taipei Hotel
Performance |
| Timeline |
| International CSRC |
| Landis Taipei Hotel |
International CSRC and Landis Taipei Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International CSRC and Landis Taipei
The main advantage of trading using opposite International CSRC and Landis Taipei positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International CSRC position performs unexpectedly, Landis Taipei 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 Landis Taipei will offset losses from the drop in Landis Taipei's long position.| International CSRC vs. Cheng Shin Rubber | International CSRC vs. Taiwan Cement Corp | International CSRC vs. China Steel Chemical | International CSRC vs. Yulon Motor Co |
| Landis Taipei vs. Formosa International Hotels | Landis Taipei vs. Ambassador Hotel | Landis Taipei vs. FDC International Hotels | Landis Taipei vs. First Hotel 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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