Correlation Between TONGDAO LIEPGR and PERSOL HOLDINGS
Can any of the company-specific risk be diversified away by investing in both TONGDAO LIEPGR and PERSOL HOLDINGS 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 TONGDAO LIEPGR and PERSOL HOLDINGS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TONGDAO LIEPGR DL 0001 and PERSOL HOLDINGS LTD, you can compare the effects of market volatilities on TONGDAO LIEPGR and PERSOL HOLDINGS 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 TONGDAO LIEPGR with a short position of PERSOL HOLDINGS. Check out your portfolio center. Please also check ongoing floating volatility patterns of TONGDAO LIEPGR and PERSOL HOLDINGS.
Diversification Opportunities for TONGDAO LIEPGR and PERSOL HOLDINGS
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between TONGDAO and PERSOL is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding TONGDAO LIEPGR DL 0001 and PERSOL HOLDINGS LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PERSOL HOLDINGS LTD and TONGDAO LIEPGR 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 TONGDAO LIEPGR DL 0001 are associated (or correlated) with PERSOL HOLDINGS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PERSOL HOLDINGS LTD has no effect on the direction of TONGDAO LIEPGR i.e., TONGDAO LIEPGR and PERSOL HOLDINGS go up and down completely randomly.
Pair Corralation between TONGDAO LIEPGR and PERSOL HOLDINGS
Assuming the 90 days horizon TONGDAO LIEPGR DL 0001 is expected to generate 6.5 times more return on investment than PERSOL HOLDINGS. However, TONGDAO LIEPGR is 6.5 times more volatile than PERSOL HOLDINGS LTD. It trades about 0.27 of its potential returns per unit of risk. PERSOL HOLDINGS LTD is currently generating about 0.22 per unit of risk. If you would invest 32.00 in TONGDAO LIEPGR DL 0001 on November 28, 2024 and sell it today you would earn a total of 22.00 from holding TONGDAO LIEPGR DL 0001 or generate 68.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
TONGDAO LIEPGR DL 0001 vs. PERSOL HOLDINGS LTD
Performance |
| Timeline |
| TONGDAO LIEPGR DL |
| PERSOL HOLDINGS LTD |
TONGDAO LIEPGR and PERSOL HOLDINGS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TONGDAO LIEPGR and PERSOL HOLDINGS
The main advantage of trading using opposite TONGDAO LIEPGR and PERSOL HOLDINGS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TONGDAO LIEPGR position performs unexpectedly, PERSOL HOLDINGS 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 PERSOL HOLDINGS will offset losses from the drop in PERSOL HOLDINGS's long position.| TONGDAO LIEPGR vs. Recruit Holdings Co | TONGDAO LIEPGR vs. Randstad NV | TONGDAO LIEPGR vs. Adecco Group AG | TONGDAO LIEPGR vs. PERSOL HOLDINGS LTD |
| PERSOL HOLDINGS vs. Medical Properties Trust | PERSOL HOLDINGS vs. ONWARD MEDICAL BV | PERSOL HOLDINGS vs. EBRO FOODS | PERSOL HOLDINGS vs. Merit Medical Systems |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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