Correlation Between Lihtai Construction and CVC Technologies
Can any of the company-specific risk be diversified away by investing in both Lihtai Construction and CVC Technologies 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 Lihtai Construction and CVC Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lihtai Construction Enterprise and CVC Technologies, you can compare the effects of market volatilities on Lihtai Construction and CVC Technologies 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 Lihtai Construction with a short position of CVC Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lihtai Construction and CVC Technologies.
Diversification Opportunities for Lihtai Construction and CVC Technologies
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Lihtai and CVC is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Lihtai Construction Enterprise and CVC Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVC Technologies and Lihtai Construction 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 Lihtai Construction Enterprise are associated (or correlated) with CVC Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CVC Technologies has no effect on the direction of Lihtai Construction i.e., Lihtai Construction and CVC Technologies go up and down completely randomly.
Pair Corralation between Lihtai Construction and CVC Technologies
Assuming the 90 days trading horizon Lihtai Construction Enterprise is expected to generate 0.22 times more return on investment than CVC Technologies. However, Lihtai Construction Enterprise is 4.58 times less risky than CVC Technologies. It trades about 0.12 of its potential returns per unit of risk. CVC Technologies is currently generating about -0.01 per unit of risk. If you would invest 8,160 in Lihtai Construction Enterprise on October 29, 2024 and sell it today you would earn a total of 70.00 from holding Lihtai Construction Enterprise or generate 0.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lihtai Construction Enterprise vs. CVC Technologies
Performance |
| Timeline |
| Lihtai Construction |
| CVC Technologies |
Lihtai Construction and CVC Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lihtai Construction and CVC Technologies
The main advantage of trading using opposite Lihtai Construction and CVC Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lihtai Construction position performs unexpectedly, CVC Technologies 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 CVC Technologies will offset losses from the drop in CVC Technologies' long position.| Lihtai Construction vs. Ruentex Development Co | Lihtai Construction vs. Ruentex Industries | Lihtai Construction vs. Ruentex Engineering Construction | Lihtai Construction vs. Feng Tay Enterprises |
| CVC Technologies vs. Wha Yu Industrial | CVC Technologies vs. International CSRC Investment | CVC Technologies vs. Excelsior Medical Co | CVC Technologies vs. SuperAlloy Industrial 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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