Correlation Between Landis Taipei and Quintain Steel
Can any of the company-specific risk be diversified away by investing in both Landis Taipei and Quintain Steel 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 Landis Taipei and Quintain Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Landis Taipei Hotel and Quintain Steel Co, you can compare the effects of market volatilities on Landis Taipei and Quintain Steel 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 Landis Taipei with a short position of Quintain Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Landis Taipei and Quintain Steel.
Diversification Opportunities for Landis Taipei and Quintain Steel
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Landis and Quintain is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Landis Taipei Hotel and Quintain Steel Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quintain Steel and Landis Taipei 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 Landis Taipei Hotel are associated (or correlated) with Quintain Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quintain Steel has no effect on the direction of Landis Taipei i.e., Landis Taipei and Quintain Steel go up and down completely randomly.
Pair Corralation between Landis Taipei and Quintain Steel
Assuming the 90 days trading horizon Landis Taipei Hotel is expected to under-perform the Quintain Steel. In addition to that, Landis Taipei is 1.96 times more volatile than Quintain Steel Co. It trades about -0.09 of its total potential returns per unit of risk. Quintain Steel Co is currently generating about -0.16 per unit of volatility. If you would invest 1,195 in Quintain Steel Co on September 1, 2024 and sell it today you would lose (40.00) from holding Quintain Steel Co or give up 3.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Landis Taipei Hotel vs. Quintain Steel Co
Performance |
| Timeline |
| Landis Taipei Hotel |
| Quintain Steel |
Landis Taipei and Quintain Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Landis Taipei and Quintain Steel
The main advantage of trading using opposite Landis Taipei and Quintain Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Landis Taipei position performs unexpectedly, Quintain Steel 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 Quintain Steel will offset losses from the drop in Quintain Steel's long position.| Landis Taipei vs. Formosa International Hotels | Landis Taipei vs. Ambassador Hotel | Landis Taipei vs. FDC International Hotels | Landis Taipei vs. First Hotel Co |
| Quintain Steel vs. Tycoons Group Enterprise | Quintain Steel vs. Chung Hwa Pulp | Quintain Steel vs. China Man Made Fiber | Quintain Steel vs. Champion Building Materials |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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