Correlation Between TONGDAO LIEPGR and STHREE PLC
Can any of the company-specific risk be diversified away by investing in both TONGDAO LIEPGR and STHREE PLC 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 STHREE PLC 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 STHREE PLC LS, you can compare the effects of market volatilities on TONGDAO LIEPGR and STHREE PLC 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 STHREE PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of TONGDAO LIEPGR and STHREE PLC.
Diversification Opportunities for TONGDAO LIEPGR and STHREE PLC
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between TONGDAO and STHREE is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding TONGDAO LIEPGR DL 0001 and STHREE PLC LS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STHREE PLC LS 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 STHREE PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STHREE PLC LS has no effect on the direction of TONGDAO LIEPGR i.e., TONGDAO LIEPGR and STHREE PLC go up and down completely randomly.
Pair Corralation between TONGDAO LIEPGR and STHREE PLC
Assuming the 90 days horizon TONGDAO LIEPGR DL 0001 is expected to generate 5.14 times more return on investment than STHREE PLC. However, TONGDAO LIEPGR is 5.14 times more volatile than STHREE PLC LS. It trades about 0.27 of its potential returns per unit of risk. STHREE PLC LS is currently generating about -0.21 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 Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TONGDAO LIEPGR DL 0001 vs. STHREE PLC LS
Performance |
| Timeline |
| TONGDAO LIEPGR DL |
| STHREE PLC LS |
TONGDAO LIEPGR and STHREE PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TONGDAO LIEPGR and STHREE PLC
The main advantage of trading using opposite TONGDAO LIEPGR and STHREE PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TONGDAO LIEPGR position performs unexpectedly, STHREE PLC 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 STHREE PLC will offset losses from the drop in STHREE PLC'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 |
| STHREE PLC vs. BIOPHARMA CREDIT DL | STHREE PLC vs. UNIQA INSURANCE GR | STHREE PLC vs. COREBRIDGE FINANCIAL INC | STHREE PLC vs. Takark Jelzlogbank Nyrt |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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