Correlation Between Leafbuyer Technologies and Tencent Holdings
Can any of the company-specific risk be diversified away by investing in both Leafbuyer Technologies and Tencent Holdings 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 Leafbuyer Technologies and Tencent Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leafbuyer Technologies and Tencent Holdings, you can compare the effects of market volatilities on Leafbuyer Technologies and Tencent Holdings 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 Leafbuyer Technologies with a short position of Tencent Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leafbuyer Technologies and Tencent Holdings.
Diversification Opportunities for Leafbuyer Technologies and Tencent Holdings
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Leafbuyer and Tencent is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Leafbuyer Technologies and Tencent Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tencent Holdings and Leafbuyer Technologies 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 Leafbuyer Technologies are associated (or correlated) with Tencent Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tencent Holdings has no effect on the direction of Leafbuyer Technologies i.e., Leafbuyer Technologies and Tencent Holdings go up and down completely randomly.
Pair Corralation between Leafbuyer Technologies and Tencent Holdings
Given the investment horizon of 90 days Leafbuyer Technologies is expected to generate 31.48 times more return on investment than Tencent Holdings. However, Leafbuyer Technologies is 31.48 times more volatile than Tencent Holdings. It trades about 0.09 of its potential returns per unit of risk. Tencent Holdings is currently generating about 0.04 per unit of risk. If you would invest 4.40 in Leafbuyer Technologies on August 26, 2024 and sell it today you would lose (3.10) from holding Leafbuyer Technologies or give up 70.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Leafbuyer Technologies vs. Tencent Holdings
Performance |
| Timeline |
| Leafbuyer Technologies |
| Tencent Holdings |
Leafbuyer Technologies and Tencent Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leafbuyer Technologies and Tencent Holdings
The main advantage of trading using opposite Leafbuyer Technologies and Tencent Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leafbuyer Technologies position performs unexpectedly, Tencent Holdings 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 Tencent Holdings will offset losses from the drop in Tencent Holdings' long position.| Leafbuyer Technologies vs. Tencent Holdings | Leafbuyer Technologies vs. Trivago NV | Leafbuyer Technologies vs. YY Inc Class | Leafbuyer Technologies vs. DouYu International Holdings |
| Tencent Holdings vs. Trivago NV | Tencent Holdings vs. YY Inc Class | Tencent Holdings vs. DouYu International Holdings | Tencent Holdings vs. Baidu Inc |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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