Correlation Between X Legend and Abnova Taiwan
Can any of the company-specific risk be diversified away by investing in both X Legend and Abnova Taiwan 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 Abnova Taiwan 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 Abnova Taiwan Corp, you can compare the effects of market volatilities on X Legend and Abnova Taiwan 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 Abnova Taiwan. Check out your portfolio center. Please also check ongoing floating volatility patterns of X Legend and Abnova Taiwan.
Diversification Opportunities for X Legend and Abnova Taiwan
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 4994 and Abnova is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding X Legend Entertainment Co and Abnova Taiwan Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abnova Taiwan Corp 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 Abnova Taiwan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abnova Taiwan Corp has no effect on the direction of X Legend i.e., X Legend and Abnova Taiwan go up and down completely randomly.
Pair Corralation between X Legend and Abnova Taiwan
Assuming the 90 days trading horizon X Legend Entertainment Co is expected to generate 2.51 times more return on investment than Abnova Taiwan. However, X Legend is 2.51 times more volatile than Abnova Taiwan Corp. It trades about 0.06 of its potential returns per unit of risk. Abnova Taiwan Corp is currently generating about -0.03 per unit of risk. If you would invest 4,690 in X Legend Entertainment Co on November 29, 2024 and sell it today you would earn a total of 5,710 from holding X Legend Entertainment Co or generate 121.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
X Legend Entertainment Co vs. Abnova Taiwan Corp
Performance |
| Timeline |
| X Legend Entertainment |
| Abnova Taiwan Corp |
X Legend and Abnova Taiwan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with X Legend and Abnova Taiwan
The main advantage of trading using opposite X Legend and Abnova Taiwan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X Legend position performs unexpectedly, Abnova Taiwan 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 Abnova Taiwan will offset losses from the drop in Abnova Taiwan's long position.| X Legend vs. Abnova Taiwan Corp | X Legend vs. Cheng Mei Materials | X Legend vs. BizLink Holding | X Legend vs. Lemtech Holdings Co |
| Abnova Taiwan vs. Sinphar Pharmaceutical Co | Abnova Taiwan vs. Wellell | Abnova Taiwan vs. Phytohealth Corp | Abnova Taiwan vs. YungShin Global Holding |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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