Correlation Between Landis Taipei and X Legend
Can any of the company-specific risk be diversified away by investing in both Landis Taipei and X Legend 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 X Legend 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 X Legend Entertainment Co, you can compare the effects of market volatilities on Landis Taipei and X Legend 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 X Legend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Landis Taipei and X Legend.
Diversification Opportunities for Landis Taipei and X Legend
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Landis and 4994 is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Landis Taipei Hotel and X Legend Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on X Legend Entertainment 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 X Legend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of X Legend Entertainment has no effect on the direction of Landis Taipei i.e., Landis Taipei and X Legend go up and down completely randomly.
Pair Corralation between Landis Taipei and X Legend
Assuming the 90 days trading horizon Landis Taipei is expected to generate 13.54 times less return on investment than X Legend. But when comparing it to its historical volatility, Landis Taipei Hotel is 1.19 times less risky than X Legend. It trades about 0.01 of its potential returns per unit of risk. X Legend Entertainment Co is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 4,110 in X Legend Entertainment Co on August 29, 2024 and sell it today you would earn a total of 6,890 from holding X Legend Entertainment Co or generate 167.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Landis Taipei Hotel vs. X Legend Entertainment Co
Performance |
| Timeline |
| Landis Taipei Hotel |
| X Legend Entertainment |
Landis Taipei and X Legend Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Landis Taipei and X Legend
The main advantage of trading using opposite Landis Taipei and X Legend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Landis Taipei position performs unexpectedly, X Legend 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 X Legend will offset losses from the drop in X Legend'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 |
| X Legend vs. Chunghwa Telecom Co | X Legend vs. Far EasTone Telecommunications | X Legend vs. CTBC Financial Holding | X Legend vs. Fubon Financial Holding |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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