Correlation Between Tingyi Holding and Lungyen Life
Can any of the company-specific risk be diversified away by investing in both Tingyi Holding and Lungyen Life 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 Tingyi Holding and Lungyen Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tingyi Holding Corp and Lungyen Life Service, you can compare the effects of market volatilities on Tingyi Holding and Lungyen Life 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 Tingyi Holding with a short position of Lungyen Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tingyi Holding and Lungyen Life.
Diversification Opportunities for Tingyi Holding and Lungyen Life
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Tingyi and Lungyen is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Tingyi Holding Corp and Lungyen Life Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lungyen Life Service and Tingyi Holding 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 Tingyi Holding Corp are associated (or correlated) with Lungyen Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lungyen Life Service has no effect on the direction of Tingyi Holding i.e., Tingyi Holding and Lungyen Life go up and down completely randomly.
Pair Corralation between Tingyi Holding and Lungyen Life
Assuming the 90 days trading horizon Tingyi Holding Corp is expected to generate 1.66 times more return on investment than Lungyen Life. However, Tingyi Holding is 1.66 times more volatile than Lungyen Life Service. It trades about 0.14 of its potential returns per unit of risk. Lungyen Life Service is currently generating about -0.18 per unit of risk. If you would invest 2,165 in Tingyi Holding Corp on October 14, 2024 and sell it today you would earn a total of 145.00 from holding Tingyi Holding Corp or generate 6.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tingyi Holding Corp vs. Lungyen Life Service
Performance |
| Timeline |
| Tingyi Holding Corp |
| Lungyen Life Service |
Tingyi Holding and Lungyen Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tingyi Holding and Lungyen Life
The main advantage of trading using opposite Tingyi Holding and Lungyen Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tingyi Holding position performs unexpectedly, Lungyen Life 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 Lungyen Life will offset losses from the drop in Lungyen Life's long position.| Tingyi Holding vs. Uni President Enterprises Corp | Tingyi Holding vs. President Chain Store | Tingyi Holding vs. Formosa Chemicals Fibre | Tingyi Holding vs. Formosa Petrochemical Corp |
| Lungyen Life vs. Da Lue International | Lungyen Life vs. Foxconn Technology Co | Lungyen Life vs. Fubon Financial Holding | Lungyen Life vs. YuantaP shares Taiwan Top |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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