Correlation Between All Ring and Lian Hwa
Can any of the company-specific risk be diversified away by investing in both All Ring 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 All Ring and Lian Hwa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between All Ring Tech and Lian Hwa Foods, you can compare the effects of market volatilities on All Ring 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 All Ring with a short position of Lian Hwa. Check out your portfolio center. Please also check ongoing floating volatility patterns of All Ring and Lian Hwa.
Diversification Opportunities for All Ring and Lian Hwa
Weak diversification
The 3 months correlation between All and Lian is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding All Ring Tech 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 All Ring 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 All Ring Tech 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 All Ring i.e., All Ring and Lian Hwa go up and down completely randomly.
Pair Corralation between All Ring and Lian Hwa
Assuming the 90 days trading horizon All Ring Tech is expected to under-perform the Lian Hwa. In addition to that, All Ring is 2.74 times more volatile than Lian Hwa Foods. It trades about -0.06 of its total potential returns per unit of risk. Lian Hwa Foods is currently generating about 0.09 per unit of volatility. If you would invest 11,700 in Lian Hwa Foods on September 3, 2024 and sell it today you would earn a total of 250.00 from holding Lian Hwa Foods or generate 2.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
All Ring Tech vs. Lian Hwa Foods
Performance |
| Timeline |
| All Ring Tech |
| Lian Hwa Foods |
All Ring and Lian Hwa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with All Ring and Lian Hwa
The main advantage of trading using opposite All Ring and Lian Hwa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if All Ring 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.| All Ring vs. Lian Hwa Foods | All Ring vs. Standard Foods Corp | All Ring vs. Hi Lai Foods Co | All Ring vs. TWOWAY Communications |
| Lian Hwa vs. Standard Foods Corp | Lian Hwa vs. TTET Union Corp | Lian Hwa vs. Uni President Enterprises Corp | Lian Hwa vs. Charoen Pokphand Enterprise |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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