Correlation Between Shan Loong and Li Peng
Can any of the company-specific risk be diversified away by investing in both Shan Loong and Li Peng 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 Shan Loong and Li Peng into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shan Loong Transportation Co and Li Peng Enterprise, you can compare the effects of market volatilities on Shan Loong and Li Peng 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 Shan Loong with a short position of Li Peng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shan Loong and Li Peng.
Diversification Opportunities for Shan Loong and Li Peng
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shan and 1447 is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Shan Loong Transportation Co and Li Peng Enterprise in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Li Peng Enterprise and Shan Loong 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 Shan Loong Transportation Co are associated (or correlated) with Li Peng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Li Peng Enterprise has no effect on the direction of Shan Loong i.e., Shan Loong and Li Peng go up and down completely randomly.
Pair Corralation between Shan Loong and Li Peng
Assuming the 90 days trading horizon Shan Loong Transportation Co is expected to under-perform the Li Peng. But the stock apears to be less risky and, when comparing its historical volatility, Shan Loong Transportation Co is 2.11 times less risky than Li Peng. The stock trades about -0.11 of its potential returns per unit of risk. The Li Peng Enterprise is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 789.00 in Li Peng Enterprise on September 4, 2024 and sell it today you would lose (16.00) from holding Li Peng Enterprise or give up 2.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shan Loong Transportation Co vs. Li Peng Enterprise
Performance |
| Timeline |
| Shan Loong Transport |
| Li Peng Enterprise |
Shan Loong and Li Peng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shan Loong and Li Peng
The main advantage of trading using opposite Shan Loong and Li Peng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shan Loong position performs unexpectedly, Li Peng 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 Li Peng will offset losses from the drop in Li Peng's long position.| Shan Loong vs. Kerry TJ Logistics | Shan Loong vs. China Container Terminal | Shan Loong vs. Eastern Media International | Shan Loong vs. Taiwan Navigation Co |
| Li Peng vs. Tainan Spinning Co | Li Peng vs. Chia Her Industrial | Li Peng vs. WiseChip Semiconductor | Li Peng vs. Novatek Microelectronics 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |