Correlation Between Lingsen Precision and Taiwan Chinsan
Can any of the company-specific risk be diversified away by investing in both Lingsen Precision and Taiwan Chinsan 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 Lingsen Precision and Taiwan Chinsan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lingsen Precision Industries and Taiwan Chinsan Electronic, you can compare the effects of market volatilities on Lingsen Precision and Taiwan Chinsan 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 Lingsen Precision with a short position of Taiwan Chinsan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lingsen Precision and Taiwan Chinsan.
Diversification Opportunities for Lingsen Precision and Taiwan Chinsan
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lingsen and Taiwan is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Lingsen Precision Industries and Taiwan Chinsan Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taiwan Chinsan Electronic and Lingsen Precision 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 Lingsen Precision Industries are associated (or correlated) with Taiwan Chinsan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taiwan Chinsan Electronic has no effect on the direction of Lingsen Precision i.e., Lingsen Precision and Taiwan Chinsan go up and down completely randomly.
Pair Corralation between Lingsen Precision and Taiwan Chinsan
Assuming the 90 days trading horizon Lingsen Precision Industries is expected to under-perform the Taiwan Chinsan. In addition to that, Lingsen Precision is 1.23 times more volatile than Taiwan Chinsan Electronic. It trades about -0.07 of its total potential returns per unit of risk. Taiwan Chinsan Electronic is currently generating about 0.1 per unit of volatility. If you would invest 3,655 in Taiwan Chinsan Electronic on September 3, 2024 and sell it today you would earn a total of 925.00 from holding Taiwan Chinsan Electronic or generate 25.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lingsen Precision Industries vs. Taiwan Chinsan Electronic
Performance |
| Timeline |
| Lingsen Precision |
| Taiwan Chinsan Electronic |
Lingsen Precision and Taiwan Chinsan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lingsen Precision and Taiwan Chinsan
The main advantage of trading using opposite Lingsen Precision and Taiwan Chinsan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lingsen Precision position performs unexpectedly, Taiwan Chinsan 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 Taiwan Chinsan will offset losses from the drop in Taiwan Chinsan's long position.| Lingsen Precision vs. Taiwan Chinsan Electronic | Lingsen Precision vs. Lien Chang Electronic | Lingsen Precision vs. Elite Material Co | Lingsen Precision vs. ABC Taiwan Electronics |
| Taiwan Chinsan vs. Hon Hai Precision | Taiwan Chinsan vs. Delta Electronics | Taiwan Chinsan vs. LARGAN Precision Co | Taiwan Chinsan vs. AU Optronics |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |