Correlation Between DRWu Skincare and Luo Lih
Can any of the company-specific risk be diversified away by investing in both DRWu Skincare and Luo Lih 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 DRWu Skincare and Luo Lih into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DRWu Skincare Co and Luo Lih Fen, you can compare the effects of market volatilities on DRWu Skincare and Luo Lih 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 DRWu Skincare with a short position of Luo Lih. Check out your portfolio center. Please also check ongoing floating volatility patterns of DRWu Skincare and Luo Lih.
Diversification Opportunities for DRWu Skincare and Luo Lih
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DRWu and Luo is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding DRWu Skincare Co and Luo Lih Fen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Luo Lih Fen and DRWu Skincare 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 DRWu Skincare Co are associated (or correlated) with Luo Lih. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Luo Lih Fen has no effect on the direction of DRWu Skincare i.e., DRWu Skincare and Luo Lih go up and down completely randomly.
Pair Corralation between DRWu Skincare and Luo Lih
Assuming the 90 days trading horizon DRWu Skincare Co is expected to generate 0.99 times more return on investment than Luo Lih. However, DRWu Skincare Co is 1.01 times less risky than Luo Lih. It trades about -0.16 of its potential returns per unit of risk. Luo Lih Fen is currently generating about -0.4 per unit of risk. If you would invest 15,591 in DRWu Skincare Co on September 12, 2024 and sell it today you would lose (541.00) from holding DRWu Skincare Co or give up 3.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
DRWu Skincare Co vs. Luo Lih Fen
Performance |
| Timeline |
| DRWu Skincare |
| Luo Lih Fen |
DRWu Skincare and Luo Lih Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DRWu Skincare and Luo Lih
The main advantage of trading using opposite DRWu Skincare and Luo Lih positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DRWu Skincare position performs unexpectedly, Luo Lih 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 Luo Lih will offset losses from the drop in Luo Lih's long position.| DRWu Skincare vs. Ruentex Development Co | DRWu Skincare vs. Symtek Automation Asia | DRWu Skincare vs. CTCI Corp | DRWu Skincare vs. Information Technology Total |
| Luo Lih vs. Ruentex Development Co | Luo Lih vs. Symtek Automation Asia | Luo Lih vs. CTCI Corp | Luo Lih vs. Information Technology Total |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |