Correlation Between Cameo Communications and Lian Hwa
Can any of the company-specific risk be diversified away by investing in both Cameo Communications and Lian Hwa 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 Cameo Communications and Lian Hwa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cameo Communications and Lian Hwa Foods, you can compare the effects of market volatilities on Cameo Communications and Lian Hwa 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 Cameo Communications with a short position of Lian Hwa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cameo Communications and Lian Hwa.
Diversification Opportunities for Cameo Communications and Lian Hwa
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Cameo and Lian is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Cameo Communications and Lian Hwa Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lian Hwa Foods and Cameo Communications 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 Cameo Communications are associated (or correlated) with Lian Hwa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lian Hwa Foods has no effect on the direction of Cameo Communications i.e., Cameo Communications and Lian Hwa go up and down completely randomly.
Pair Corralation between Cameo Communications and Lian Hwa
Assuming the 90 days trading horizon Cameo Communications is expected to generate 1.62 times less return on investment than Lian Hwa. In addition to that, Cameo Communications is 1.49 times more volatile than Lian Hwa Foods. It trades about 0.04 of its total potential returns per unit of risk. Lian Hwa Foods is currently generating about 0.11 per unit of volatility. If you would invest 8,820 in Lian Hwa Foods on September 14, 2024 and sell it today you would earn a total of 4,030 from holding Lian Hwa Foods or generate 45.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cameo Communications vs. Lian Hwa Foods
Performance |
| Timeline |
| Cameo Communications |
| Lian Hwa Foods |
Cameo Communications and Lian Hwa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cameo Communications and Lian Hwa
The main advantage of trading using opposite Cameo Communications and Lian Hwa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cameo Communications position performs unexpectedly, Lian Hwa 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 Lian Hwa will offset losses from the drop in Lian Hwa's long position.| Cameo Communications vs. Gemtek Technology Co | Cameo Communications vs. CyberTAN Technology | Cameo Communications vs. Alpha Networks | Cameo Communications vs. D Link Corp |
| Lian Hwa vs. Standard Foods Corp | Lian Hwa vs. Uni President Enterprises Corp | Lian Hwa vs. Great Wall Enterprise | Lian Hwa vs. Ruentex Development 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Stocks Directory Find actively traded stocks across global markets |