Correlation Between Canlan Ice and Luduson G
Can any of the company-specific risk be diversified away by investing in both Canlan Ice and Luduson G 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 Canlan Ice and Luduson G into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canlan Ice Sports and Luduson G, you can compare the effects of market volatilities on Canlan Ice and Luduson G 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 Canlan Ice with a short position of Luduson G. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canlan Ice and Luduson G.
Diversification Opportunities for Canlan Ice and Luduson G
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Canlan and Luduson is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Canlan Ice Sports and Luduson G in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Luduson G and Canlan Ice 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 Canlan Ice Sports are associated (or correlated) with Luduson G. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Luduson G has no effect on the direction of Canlan Ice i.e., Canlan Ice and Luduson G go up and down completely randomly.
Pair Corralation between Canlan Ice and Luduson G
Assuming the 90 days horizon Canlan Ice is expected to generate 304.75 times less return on investment than Luduson G. But when comparing it to its historical volatility, Canlan Ice Sports is 482.7 times less risky than Luduson G. It trades about 0.14 of its potential returns per unit of risk. Luduson G is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 10.00 in Luduson G on September 3, 2024 and sell it today you would lose (9.70) from holding Luduson G or give up 97.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canlan Ice Sports vs. Luduson G
Performance |
| Timeline |
| Canlan Ice Sports |
| Luduson G |
Canlan Ice and Luduson G Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canlan Ice and Luduson G
The main advantage of trading using opposite Canlan Ice and Luduson G positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canlan Ice position performs unexpectedly, Luduson G 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 Luduson G will offset losses from the drop in Luduson G's long position.| Canlan Ice vs. Weibo Corp | Canlan Ice vs. WiMi Hologram Cloud | Canlan Ice vs. 51Talk Online Education | Canlan Ice vs. Relx PLC ADR |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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