Correlation Between Loop Telecommunicatio and Grand Fortune
Can any of the company-specific risk be diversified away by investing in both Loop Telecommunicatio and Grand Fortune 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 Loop Telecommunicatio and Grand Fortune into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Loop Telecommunication International and Grand Fortune Securities, you can compare the effects of market volatilities on Loop Telecommunicatio and Grand Fortune 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 Loop Telecommunicatio with a short position of Grand Fortune. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loop Telecommunicatio and Grand Fortune.
Diversification Opportunities for Loop Telecommunicatio and Grand Fortune
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Loop and Grand is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Loop Telecommunication Interna and Grand Fortune Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grand Fortune Securities and Loop Telecommunicatio 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 Loop Telecommunication International are associated (or correlated) with Grand Fortune. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grand Fortune Securities has no effect on the direction of Loop Telecommunicatio i.e., Loop Telecommunicatio and Grand Fortune go up and down completely randomly.
Pair Corralation between Loop Telecommunicatio and Grand Fortune
Assuming the 90 days trading horizon Loop Telecommunication International is expected to under-perform the Grand Fortune. In addition to that, Loop Telecommunicatio is 6.2 times more volatile than Grand Fortune Securities. It trades about -0.04 of its total potential returns per unit of risk. Grand Fortune Securities is currently generating about 0.03 per unit of volatility. If you would invest 1,225 in Grand Fortune Securities on October 25, 2024 and sell it today you would earn a total of 5.00 from holding Grand Fortune Securities or generate 0.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Loop Telecommunication Interna vs. Grand Fortune Securities
Performance |
| Timeline |
| Loop Telecommunication |
| Grand Fortune Securities |
Loop Telecommunicatio and Grand Fortune Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Loop Telecommunicatio and Grand Fortune
The main advantage of trading using opposite Loop Telecommunicatio and Grand Fortune positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loop Telecommunicatio position performs unexpectedly, Grand Fortune 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 Grand Fortune will offset losses from the drop in Grand Fortune's long position.| Loop Telecommunicatio vs. Edimax Technology Co | Loop Telecommunicatio vs. Billion Electric Co | Loop Telecommunicatio vs. CyberTAN Technology | Loop Telecommunicatio vs. Emerging Display Technologies |
| Grand Fortune vs. Chialin Precision Industrial | Grand Fortune vs. China Mobile | Grand Fortune vs. Loop Telecommunication International | Grand Fortune vs. Wah Hong Industrial |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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