Correlation Between Li Kang and Leatec Fine
Can any of the company-specific risk be diversified away by investing in both Li Kang and Leatec Fine 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 Leatec Fine 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 Leatec Fine Ceramics, you can compare the effects of market volatilities on Li Kang and Leatec Fine 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 Leatec Fine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Li Kang and Leatec Fine.
Diversification Opportunities for Li Kang and Leatec Fine
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 6242 and Leatec is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Li Kang Biomedical and Leatec Fine Ceramics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leatec Fine Ceramics 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 Leatec Fine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leatec Fine Ceramics has no effect on the direction of Li Kang i.e., Li Kang and Leatec Fine go up and down completely randomly.
Pair Corralation between Li Kang and Leatec Fine
Assuming the 90 days trading horizon Li Kang is expected to generate 33.02 times less return on investment than Leatec Fine. But when comparing it to its historical volatility, Li Kang Biomedical is 3.63 times less risky than Leatec Fine. It trades about 0.01 of its potential returns per unit of risk. Leatec Fine Ceramics is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,630 in Leatec Fine Ceramics on September 12, 2024 and sell it today you would earn a total of 225.00 from holding Leatec Fine Ceramics or generate 8.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Li Kang Biomedical vs. Leatec Fine Ceramics
Performance |
| Timeline |
| Li Kang Biomedical |
| Leatec Fine Ceramics |
Li Kang and Leatec Fine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Li Kang and Leatec Fine
The main advantage of trading using opposite Li Kang and Leatec Fine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Li Kang position performs unexpectedly, Leatec Fine 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 Leatec Fine will offset losses from the drop in Leatec Fine'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 |
| Leatec Fine vs. Sports Gear Co | Leatec Fine vs. Chinese Maritime Transport | Leatec Fine vs. BenQ Materials Corp | Leatec Fine vs. Shinkong Insurance 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |