Correlation Between RiTdisplay Corp and Li Kang
Can any of the company-specific risk be diversified away by investing in both RiTdisplay Corp and Li Kang 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 RiTdisplay Corp and Li Kang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RiTdisplay Corp and Li Kang Biomedical, you can compare the effects of market volatilities on RiTdisplay Corp and Li Kang 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 RiTdisplay Corp with a short position of Li Kang. Check out your portfolio center. Please also check ongoing floating volatility patterns of RiTdisplay Corp and Li Kang.
Diversification Opportunities for RiTdisplay Corp and Li Kang
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between RiTdisplay and 6242 is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding RiTdisplay Corp and Li Kang Biomedical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Li Kang Biomedical and RiTdisplay Corp 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 RiTdisplay Corp are associated (or correlated) with Li Kang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Li Kang Biomedical has no effect on the direction of RiTdisplay Corp i.e., RiTdisplay Corp and Li Kang go up and down completely randomly.
Pair Corralation between RiTdisplay Corp and Li Kang
Assuming the 90 days trading horizon RiTdisplay Corp is expected to generate 1.54 times more return on investment than Li Kang. However, RiTdisplay Corp is 1.54 times more volatile than Li Kang Biomedical. It trades about 0.02 of its potential returns per unit of risk. Li Kang Biomedical is currently generating about 0.01 per unit of risk. If you would invest 3,681 in RiTdisplay Corp on October 27, 2024 and sell it today you would earn a total of 434.00 from holding RiTdisplay Corp or generate 11.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
RiTdisplay Corp vs. Li Kang Biomedical
Performance |
| Timeline |
| RiTdisplay Corp |
| Li Kang Biomedical |
RiTdisplay Corp and Li Kang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RiTdisplay Corp and Li Kang
The main advantage of trading using opposite RiTdisplay Corp and Li Kang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RiTdisplay Corp position performs unexpectedly, Li Kang 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 Li Kang will offset losses from the drop in Li Kang's long position.| RiTdisplay Corp vs. ANJI Technology Co | RiTdisplay Corp vs. Kinko Optical Co | RiTdisplay Corp vs. Emerging Display Technologies | RiTdisplay Corp vs. Epileds Technologies |
| Li Kang vs. WinMate Communication INC | Li Kang vs. U Media Communications | Li Kang vs. Unique Optical Industrial | Li Kang vs. Fu Burg Industrial |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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