Correlation Between LIWANLI Innovation and GeneFerm Biotechnology
Can any of the company-specific risk be diversified away by investing in both LIWANLI Innovation and GeneFerm Biotechnology 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 LIWANLI Innovation and GeneFerm Biotechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LIWANLI Innovation Co and GeneFerm Biotechnology Co, you can compare the effects of market volatilities on LIWANLI Innovation and GeneFerm Biotechnology 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 LIWANLI Innovation with a short position of GeneFerm Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of LIWANLI Innovation and GeneFerm Biotechnology.
Diversification Opportunities for LIWANLI Innovation and GeneFerm Biotechnology
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between LIWANLI and GeneFerm is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding LIWANLI Innovation Co and GeneFerm Biotechnology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GeneFerm Biotechnology and LIWANLI Innovation 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 LIWANLI Innovation Co are associated (or correlated) with GeneFerm Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GeneFerm Biotechnology has no effect on the direction of LIWANLI Innovation i.e., LIWANLI Innovation and GeneFerm Biotechnology go up and down completely randomly.
Pair Corralation between LIWANLI Innovation and GeneFerm Biotechnology
Assuming the 90 days trading horizon LIWANLI Innovation Co is expected to generate 0.71 times more return on investment than GeneFerm Biotechnology. However, LIWANLI Innovation Co is 1.42 times less risky than GeneFerm Biotechnology. It trades about 0.04 of its potential returns per unit of risk. GeneFerm Biotechnology Co is currently generating about -0.02 per unit of risk. If you would invest 2,230 in LIWANLI Innovation Co on August 26, 2024 and sell it today you would earn a total of 20.00 from holding LIWANLI Innovation Co or generate 0.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LIWANLI Innovation Co vs. GeneFerm Biotechnology Co
Performance |
| Timeline |
| LIWANLI Innovation |
| GeneFerm Biotechnology |
LIWANLI Innovation and GeneFerm Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LIWANLI Innovation and GeneFerm Biotechnology
The main advantage of trading using opposite LIWANLI Innovation and GeneFerm Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LIWANLI Innovation position performs unexpectedly, GeneFerm Biotechnology 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 GeneFerm Biotechnology will offset losses from the drop in GeneFerm Biotechnology's long position.| LIWANLI Innovation vs. Novatek Microelectronics Corp | LIWANLI Innovation vs. Quanta Computer | LIWANLI Innovation vs. United Microelectronics |
| GeneFerm Biotechnology vs. Lotus Pharmaceutical Co | GeneFerm Biotechnology vs. Center Laboratories | GeneFerm Biotechnology vs. Alar Pharmaceuticals | GeneFerm Biotechnology vs. LIWANLI Innovation 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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