Correlation Between Li Kang and Taiwan Mobile
Can any of the company-specific risk be diversified away by investing in both Li Kang and Taiwan Mobile 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 Li Kang and Taiwan Mobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Li Kang Biomedical and Taiwan Mobile Co, you can compare the effects of market volatilities on Li Kang and Taiwan Mobile 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 Li Kang with a short position of Taiwan Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Li Kang and Taiwan Mobile.
Diversification Opportunities for Li Kang and Taiwan Mobile
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between 6242 and Taiwan is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Li Kang Biomedical and Taiwan Mobile Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taiwan Mobile and Li Kang 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 Li Kang Biomedical are associated (or correlated) with Taiwan Mobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taiwan Mobile has no effect on the direction of Li Kang i.e., Li Kang and Taiwan Mobile go up and down completely randomly.
Pair Corralation between Li Kang and Taiwan Mobile
Assuming the 90 days trading horizon Li Kang Biomedical is expected to under-perform the Taiwan Mobile. But the stock apears to be less risky and, when comparing its historical volatility, Li Kang Biomedical is 1.29 times less risky than Taiwan Mobile. The stock trades about -0.03 of its potential returns per unit of risk. The Taiwan Mobile Co is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 11,350 in Taiwan Mobile Co on September 13, 2024 and sell it today you would earn a total of 50.00 from holding Taiwan Mobile Co or generate 0.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Li Kang Biomedical vs. Taiwan Mobile Co
Performance |
| Timeline |
| Li Kang Biomedical |
| Taiwan Mobile |
Li Kang and Taiwan Mobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Li Kang and Taiwan Mobile
The main advantage of trading using opposite Li Kang and Taiwan Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Li Kang position performs unexpectedly, Taiwan Mobile 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 Taiwan Mobile will offset losses from the drop in Taiwan Mobile's long position.| Li Kang vs. Standard Foods Corp | Li Kang vs. Uni President Enterprises Corp | Li Kang vs. Great Wall Enterprise | Li Kang vs. Ruentex Development Co |
| Taiwan Mobile vs. Cheng Mei Materials | Taiwan Mobile vs. Lemtech Holdings Co | Taiwan Mobile vs. Chia Chang Co | Taiwan Mobile 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Stocks Directory Find actively traded stocks across global markets | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |