Correlation Between Scan D and Lifestyle Global
Can any of the company-specific risk be diversified away by investing in both Scan D and Lifestyle Global 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 Scan D and Lifestyle Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scan D and Lifestyle Global Enterprise, you can compare the effects of market volatilities on Scan D and Lifestyle Global 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 Scan D with a short position of Lifestyle Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scan D and Lifestyle Global.
Diversification Opportunities for Scan D and Lifestyle Global
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Scan and Lifestyle is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Scan D and Lifestyle Global Enterprise in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifestyle Global Ent and Scan D 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 Scan D are associated (or correlated) with Lifestyle Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lifestyle Global Ent has no effect on the direction of Scan D i.e., Scan D and Lifestyle Global go up and down completely randomly.
Pair Corralation between Scan D and Lifestyle Global
Assuming the 90 days trading horizon Scan D is expected to under-perform the Lifestyle Global. In addition to that, Scan D is 4.09 times more volatile than Lifestyle Global Enterprise. It trades about -0.14 of its total potential returns per unit of risk. Lifestyle Global Enterprise is currently generating about -0.43 per unit of volatility. If you would invest 2,810 in Lifestyle Global Enterprise on October 13, 2024 and sell it today you would lose (200.00) from holding Lifestyle Global Enterprise or give up 7.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Scan D vs. Lifestyle Global Enterprise
Performance |
| Timeline |
| Scan D |
| Lifestyle Global Ent |
Scan D and Lifestyle Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scan D and Lifestyle Global
The main advantage of trading using opposite Scan D and Lifestyle Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scan D position performs unexpectedly, Lifestyle Global 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 Lifestyle Global will offset losses from the drop in Lifestyle Global's long position.| Scan D vs. C Media Electronics | Scan D vs. Wha Yu Industrial | Scan D vs. Compal Electronics | Scan D vs. ABC Taiwan Electronics |
| Lifestyle Global vs. United Radiant Technology | Lifestyle Global vs. Yuan High Tech Development | Lifestyle Global vs. Central Reinsurance Corp | Lifestyle Global vs. Daxin Materials Corp |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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