Correlation Between Lungyen Life and Tachan Securities
Can any of the company-specific risk be diversified away by investing in both Lungyen Life and Tachan Securities 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 Lungyen Life and Tachan Securities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lungyen Life Service and Tachan Securities Co, you can compare the effects of market volatilities on Lungyen Life and Tachan Securities 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 Lungyen Life with a short position of Tachan Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lungyen Life and Tachan Securities.
Diversification Opportunities for Lungyen Life and Tachan Securities
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lungyen and Tachan is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Lungyen Life Service and Tachan Securities Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tachan Securities and Lungyen Life 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 Lungyen Life Service are associated (or correlated) with Tachan Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tachan Securities has no effect on the direction of Lungyen Life i.e., Lungyen Life and Tachan Securities go up and down completely randomly.
Pair Corralation between Lungyen Life and Tachan Securities
Assuming the 90 days trading horizon Lungyen Life Service is expected to under-perform the Tachan Securities. In addition to that, Lungyen Life is 1.66 times more volatile than Tachan Securities Co. It trades about -0.22 of its total potential returns per unit of risk. Tachan Securities Co is currently generating about 0.0 per unit of volatility. If you would invest 1,880 in Tachan Securities Co on October 20, 2024 and sell it today you would earn a total of 0.00 from holding Tachan Securities Co or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lungyen Life Service vs. Tachan Securities Co
Performance |
| Timeline |
| Lungyen Life Service |
| Tachan Securities |
Lungyen Life and Tachan Securities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lungyen Life and Tachan Securities
The main advantage of trading using opposite Lungyen Life and Tachan Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lungyen Life position performs unexpectedly, Tachan Securities 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 Tachan Securities will offset losses from the drop in Tachan Securities' long position.| Lungyen Life vs. Cleanaway Co | Lungyen Life vs. StShine Optical Co | Lungyen Life vs. Formosa International Hotels | Lungyen Life vs. Poya International Co |
| Tachan Securities vs. Hung Sheng Construction | Tachan Securities vs. Mercuries Life Insurance | Tachan Securities vs. YungShin Global Holding | Tachan Securities vs. First Hotel 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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