Correlation Between X Legend and Standard Chemical
Can any of the company-specific risk be diversified away by investing in both X Legend and Standard Chemical 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 X Legend and Standard Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between X Legend Entertainment Co and Standard Chemical Pharmaceutical, you can compare the effects of market volatilities on X Legend and Standard Chemical 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 X Legend with a short position of Standard Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of X Legend and Standard Chemical.
Diversification Opportunities for X Legend and Standard Chemical
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between 4994 and Standard is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding X Legend Entertainment Co and Standard Chemical Pharmaceutic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Standard Chemical and X Legend 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 X Legend Entertainment Co are associated (or correlated) with Standard Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Standard Chemical has no effect on the direction of X Legend i.e., X Legend and Standard Chemical go up and down completely randomly.
Pair Corralation between X Legend and Standard Chemical
Assuming the 90 days trading horizon X Legend Entertainment Co is expected to generate 1.91 times more return on investment than Standard Chemical. However, X Legend is 1.91 times more volatile than Standard Chemical Pharmaceutical. It trades about 0.07 of its potential returns per unit of risk. Standard Chemical Pharmaceutical is currently generating about 0.02 per unit of risk. If you would invest 4,030 in X Legend Entertainment Co on September 3, 2024 and sell it today you would earn a total of 6,820 from holding X Legend Entertainment Co or generate 169.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
X Legend Entertainment Co vs. Standard Chemical Pharmaceutic
Performance |
| Timeline |
| X Legend Entertainment |
| Standard Chemical |
X Legend and Standard Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with X Legend and Standard Chemical
The main advantage of trading using opposite X Legend and Standard Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X Legend position performs unexpectedly, Standard Chemical 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 Standard Chemical will offset losses from the drop in Standard Chemical's long position.| X Legend vs. China Steel Corp | X Legend vs. Formosa Plastics Corp | X Legend vs. Cathay Financial Holding | X Legend vs. Fubon Financial Holding |
| Standard Chemical vs. Sinphar Pharmaceutical Co | Standard Chemical vs. Apex Biotechnology Corp | Standard Chemical vs. WiseChip Semiconductor | Standard Chemical 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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