Correlation Between Leatec Fine and Champion Building
Can any of the company-specific risk be diversified away by investing in both Leatec Fine and Champion Building 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 Leatec Fine and Champion Building into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leatec Fine Ceramics and Champion Building Materials, you can compare the effects of market volatilities on Leatec Fine and Champion Building 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 Leatec Fine with a short position of Champion Building. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leatec Fine and Champion Building.
Diversification Opportunities for Leatec Fine and Champion Building
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Leatec and Champion is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Leatec Fine Ceramics and Champion Building Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Champion Building and Leatec Fine 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 Leatec Fine Ceramics are associated (or correlated) with Champion Building. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Champion Building has no effect on the direction of Leatec Fine i.e., Leatec Fine and Champion Building go up and down completely randomly.
Pair Corralation between Leatec Fine and Champion Building
Assuming the 90 days trading horizon Leatec Fine is expected to generate 2.06 times less return on investment than Champion Building. In addition to that, Leatec Fine is 1.36 times more volatile than Champion Building Materials. It trades about 0.05 of its total potential returns per unit of risk. Champion Building Materials is currently generating about 0.13 per unit of volatility. If you would invest 996.00 in Champion Building Materials on September 1, 2024 and sell it today you would earn a total of 44.00 from holding Champion Building Materials or generate 4.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
Leatec Fine Ceramics vs. Champion Building Materials
Performance |
| Timeline |
| Leatec Fine Ceramics |
| Champion Building |
Leatec Fine and Champion Building Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leatec Fine and Champion Building
The main advantage of trading using opposite Leatec Fine and Champion Building positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leatec Fine position performs unexpectedly, Champion Building 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 Champion Building will offset losses from the drop in Champion Building's long position.| Leatec Fine vs. First Insurance Co | Leatec Fine vs. Sports Gear Co | Leatec Fine vs. Evergreen International Storage | Leatec Fine vs. Information Technology Total |
| Champion Building vs. China Glaze Co | Champion Building vs. Chung Hwa Pulp | Champion Building vs. Taiwan Glass Ind | Champion Building vs. China Man Made Fiber |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Stocks Directory Find actively traded stocks across global markets |