Correlation Between Pou Chen and De Licacy
Can any of the company-specific risk be diversified away by investing in both Pou Chen and De Licacy 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 Pou Chen and De Licacy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pou Chen Corp and De Licacy Industrial, you can compare the effects of market volatilities on Pou Chen and De Licacy 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 Pou Chen with a short position of De Licacy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pou Chen and De Licacy.
Diversification Opportunities for Pou Chen and De Licacy
Poor diversification
The 3 months correlation between Pou and 1464 is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Pou Chen Corp and De Licacy Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on De Licacy Industrial and Pou Chen 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 Pou Chen Corp are associated (or correlated) with De Licacy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of De Licacy Industrial has no effect on the direction of Pou Chen i.e., Pou Chen and De Licacy go up and down completely randomly.
Pair Corralation between Pou Chen and De Licacy
Assuming the 90 days trading horizon Pou Chen Corp is expected to generate 0.67 times more return on investment than De Licacy. However, Pou Chen Corp is 1.49 times less risky than De Licacy. It trades about 0.19 of its potential returns per unit of risk. De Licacy Industrial is currently generating about -0.07 per unit of risk. If you would invest 3,780 in Pou Chen Corp on September 1, 2024 and sell it today you would earn a total of 300.00 from holding Pou Chen Corp or generate 7.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pou Chen Corp vs. De Licacy Industrial
Performance |
| Timeline |
| Pou Chen Corp |
| De Licacy Industrial |
Pou Chen and De Licacy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pou Chen and De Licacy
The main advantage of trading using opposite Pou Chen and De Licacy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pou Chen position performs unexpectedly, De Licacy 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 De Licacy will offset losses from the drop in De Licacy's long position.| Pou Chen vs. Uni President Enterprises Corp | Pou Chen vs. Cheng Shin Rubber | Pou Chen vs. Far Eastern New | Pou Chen vs. Formosa Chemicals Fibre |
| De Licacy vs. Tainan Enterprises Co | De Licacy vs. Nien Hsing Textile | De Licacy vs. Wisher Industrial Co | De Licacy vs. Tex Ray Industrial Co |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |