Correlation Between Everdisplay Optronics and Lianhe Chemical
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By analyzing existing cross correlation between Everdisplay Optronics Shanghai and Lianhe Chemical Technology, you can compare the effects of market volatilities on Everdisplay Optronics and Lianhe Chemical 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 Everdisplay Optronics with a short position of Lianhe Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Everdisplay Optronics and Lianhe Chemical.
Diversification Opportunities for Everdisplay Optronics and Lianhe Chemical
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Everdisplay and Lianhe is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Everdisplay Optronics Shanghai and Lianhe Chemical Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lianhe Chemical Tech and Everdisplay Optronics 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 Everdisplay Optronics Shanghai are associated (or correlated) with Lianhe Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lianhe Chemical Tech has no effect on the direction of Everdisplay Optronics i.e., Everdisplay Optronics and Lianhe Chemical go up and down completely randomly.
Pair Corralation between Everdisplay Optronics and Lianhe Chemical
Assuming the 90 days trading horizon Everdisplay Optronics Shanghai is expected to generate 0.71 times more return on investment than Lianhe Chemical. However, Everdisplay Optronics Shanghai is 1.4 times less risky than Lianhe Chemical. It trades about -0.02 of its potential returns per unit of risk. Lianhe Chemical Technology is currently generating about -0.02 per unit of risk. If you would invest 258.00 in Everdisplay Optronics Shanghai on November 5, 2024 and sell it today you would lose (35.00) from holding Everdisplay Optronics Shanghai or give up 13.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Everdisplay Optronics Shanghai vs. Lianhe Chemical Technology
Performance |
| Timeline |
| Everdisplay Optronics |
| Lianhe Chemical Tech |
Everdisplay Optronics and Lianhe Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Everdisplay Optronics and Lianhe Chemical
The main advantage of trading using opposite Everdisplay Optronics and Lianhe Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Everdisplay Optronics position performs unexpectedly, Lianhe Chemical 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 Lianhe Chemical will offset losses from the drop in Lianhe Chemical's long position.| Everdisplay Optronics vs. Humanwell Healthcare Group | Everdisplay Optronics vs. Xinjiang Baodi Mining | Everdisplay Optronics vs. Dezhan HealthCare Co | Everdisplay Optronics vs. Shandong Sinoglory Health |
| Lianhe Chemical vs. Hua Xia Bank | Lianhe Chemical vs. Shanghai Ziyan Foods | Lianhe Chemical vs. Yankershop Food Co | Lianhe Chemical vs. Financial Street Holdings |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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