Correlation Between Lindeman Asia and Tway Air
Can any of the company-specific risk be diversified away by investing in both Lindeman Asia and Tway Air 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 Lindeman Asia and Tway Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lindeman Asia Investment and Tway Air Co, you can compare the effects of market volatilities on Lindeman Asia and Tway Air 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 Lindeman Asia with a short position of Tway Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lindeman Asia and Tway Air.
Diversification Opportunities for Lindeman Asia and Tway Air
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lindeman and Tway is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Lindeman Asia Investment and Tway Air Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tway Air and Lindeman Asia 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 Lindeman Asia Investment are associated (or correlated) with Tway Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tway Air has no effect on the direction of Lindeman Asia i.e., Lindeman Asia and Tway Air go up and down completely randomly.
Pair Corralation between Lindeman Asia and Tway Air
Assuming the 90 days trading horizon Lindeman Asia Investment is expected to under-perform the Tway Air. But the stock apears to be less risky and, when comparing its historical volatility, Lindeman Asia Investment is 1.19 times less risky than Tway Air. The stock trades about -0.15 of its potential returns per unit of risk. The Tway Air Co is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 293,500 in Tway Air Co on September 3, 2024 and sell it today you would earn a total of 1,000.00 from holding Tway Air Co or generate 0.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lindeman Asia Investment vs. Tway Air Co
Performance |
| Timeline |
| Lindeman Asia Investment |
| Tway Air |
Lindeman Asia and Tway Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lindeman Asia and Tway Air
The main advantage of trading using opposite Lindeman Asia and Tway Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lindeman Asia position performs unexpectedly, Tway Air 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 Tway Air will offset losses from the drop in Tway Air's long position.| Lindeman Asia vs. Nh Investment And | Lindeman Asia vs. Hanwha InvestmentSecurities Co | Lindeman Asia vs. Samsung Special Purpose | Lindeman Asia vs. YeSUN Tech CoLtd |
| Tway Air vs. Jin Air Co | Tway Air vs. Air Busan Co | Tway Air vs. Busan Industrial Co | Tway Air vs. UNISEM 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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