Correlation Between Chung Lien and Landis Taipei
Can any of the company-specific risk be diversified away by investing in both Chung Lien and Landis Taipei 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 Chung Lien and Landis Taipei into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chung Lien Transportation and Landis Taipei Hotel, you can compare the effects of market volatilities on Chung Lien and Landis Taipei 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 Chung Lien with a short position of Landis Taipei. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chung Lien and Landis Taipei.
Diversification Opportunities for Chung Lien and Landis Taipei
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Chung and Landis is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Chung Lien Transportation and Landis Taipei Hotel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Landis Taipei Hotel and Chung Lien 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 Chung Lien Transportation are associated (or correlated) with Landis Taipei. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Landis Taipei Hotel has no effect on the direction of Chung Lien i.e., Chung Lien and Landis Taipei go up and down completely randomly.
Pair Corralation between Chung Lien and Landis Taipei
Assuming the 90 days trading horizon Chung Lien Transportation is expected to under-perform the Landis Taipei. But the stock apears to be less risky and, when comparing its historical volatility, Chung Lien Transportation is 3.84 times less risky than Landis Taipei. The stock trades about -0.06 of its potential returns per unit of risk. The Landis Taipei Hotel is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,925 in Landis Taipei Hotel on September 1, 2024 and sell it today you would lose (125.00) from holding Landis Taipei Hotel or give up 6.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chung Lien Transportation vs. Landis Taipei Hotel
Performance |
| Timeline |
| Chung Lien Transportation |
| Landis Taipei Hotel |
Chung Lien and Landis Taipei Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chung Lien and Landis Taipei
The main advantage of trading using opposite Chung Lien and Landis Taipei positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chung Lien position performs unexpectedly, Landis Taipei 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 Landis Taipei will offset losses from the drop in Landis Taipei's long position.| Chung Lien vs. ADLINK Technology | Chung Lien vs. Chicony Power Technology | Chung Lien vs. Easywell Biomedicals | Chung Lien vs. Ching Feng Home |
| Landis Taipei vs. Formosa International Hotels | Landis Taipei vs. Ambassador Hotel | Landis Taipei vs. FDC International Hotels | Landis Taipei 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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