Correlation Between Landis Taipei and HOYA Resort
Can any of the company-specific risk be diversified away by investing in both Landis Taipei and HOYA Resort 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 HOYA Resort 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 HOYA Resort Hotel, you can compare the effects of market volatilities on Landis Taipei and HOYA Resort 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 HOYA Resort. Check out your portfolio center. Please also check ongoing floating volatility patterns of Landis Taipei and HOYA Resort.
Diversification Opportunities for Landis Taipei and HOYA Resort
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Landis and HOYA is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Landis Taipei Hotel and HOYA Resort Hotel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HOYA Resort Hotel 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 HOYA Resort. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HOYA Resort Hotel has no effect on the direction of Landis Taipei i.e., Landis Taipei and HOYA Resort go up and down completely randomly.
Pair Corralation between Landis Taipei and HOYA Resort
Assuming the 90 days trading horizon Landis Taipei Hotel is expected to generate 1.32 times more return on investment than HOYA Resort. However, Landis Taipei is 1.32 times more volatile than HOYA Resort Hotel. It trades about -0.09 of its potential returns per unit of risk. HOYA Resort Hotel is currently generating about -0.33 per unit of risk. If you would invest 1,870 in Landis Taipei Hotel on September 1, 2024 and sell it today you would lose (70.00) from holding Landis Taipei Hotel or give up 3.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Landis Taipei Hotel vs. HOYA Resort Hotel
Performance |
| Timeline |
| Landis Taipei Hotel |
| HOYA Resort Hotel |
Landis Taipei and HOYA Resort Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Landis Taipei and HOYA Resort
The main advantage of trading using opposite Landis Taipei and HOYA Resort positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Landis Taipei position performs unexpectedly, HOYA Resort 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 HOYA Resort will offset losses from the drop in HOYA Resort'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 |
| HOYA Resort vs. AVerMedia Technologies | HOYA Resort vs. Cayenne Entertainment Technology | HOYA Resort vs. Sports Gear Co | HOYA Resort vs. Provision Information CoLtd |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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