Correlation Between Dadi Early and Lian Hwa
Can any of the company-specific risk be diversified away by investing in both Dadi Early and Lian Hwa 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 Dadi Early and Lian Hwa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dadi Early Childhood Education and Lian Hwa Foods, you can compare the effects of market volatilities on Dadi Early and Lian Hwa 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 Dadi Early with a short position of Lian Hwa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dadi Early and Lian Hwa.
Diversification Opportunities for Dadi Early and Lian Hwa
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Dadi and Lian is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Dadi Early Childhood Education and Lian Hwa Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lian Hwa Foods and Dadi Early 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 Dadi Early Childhood Education are associated (or correlated) with Lian Hwa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lian Hwa Foods has no effect on the direction of Dadi Early i.e., Dadi Early and Lian Hwa go up and down completely randomly.
Pair Corralation between Dadi Early and Lian Hwa
Assuming the 90 days trading horizon Dadi Early Childhood Education is expected to under-perform the Lian Hwa. In addition to that, Dadi Early is 1.76 times more volatile than Lian Hwa Foods. It trades about -0.08 of its total potential returns per unit of risk. Lian Hwa Foods is currently generating about 0.09 per unit of volatility. If you would invest 8,880 in Lian Hwa Foods on September 2, 2024 and sell it today you would earn a total of 3,070 from holding Lian Hwa Foods or generate 34.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dadi Early Childhood Education vs. Lian Hwa Foods
Performance |
| Timeline |
| Dadi Early Childhood |
| Lian Hwa Foods |
Dadi Early and Lian Hwa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dadi Early and Lian Hwa
The main advantage of trading using opposite Dadi Early and Lian Hwa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dadi Early position performs unexpectedly, Lian Hwa 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 Lian Hwa will offset losses from the drop in Lian Hwa's long position.| Dadi Early vs. Wah Hong Industrial | Dadi Early vs. Sesoda Corp | Dadi Early vs. YuantaP shares Taiwan Electronics | Dadi Early vs. Fubon MSCI Taiwan |
| Lian Hwa vs. Lien Hwa Industrial | Lian Hwa vs. Charoen Pokphand Enterprise | Lian Hwa vs. Great Wall Enterprise | Lian Hwa vs. Uni President Enterprises Corp |
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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |