Correlation Between LightInTheBox Holding and Takung Art
Can any of the company-specific risk be diversified away by investing in both LightInTheBox Holding and Takung Art 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 LightInTheBox Holding and Takung Art into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LightInTheBox Holding Co and Takung Art Co, you can compare the effects of market volatilities on LightInTheBox Holding and Takung Art 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 LightInTheBox Holding with a short position of Takung Art. Check out your portfolio center. Please also check ongoing floating volatility patterns of LightInTheBox Holding and Takung Art.
Diversification Opportunities for LightInTheBox Holding and Takung Art
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between LightInTheBox and Takung is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding LightInTheBox Holding Co and Takung Art Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Takung Art and LightInTheBox 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 LightInTheBox Holding Co are associated (or correlated) with Takung Art. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Takung Art has no effect on the direction of LightInTheBox Holding i.e., LightInTheBox Holding and Takung Art go up and down completely randomly.
Pair Corralation between LightInTheBox Holding and Takung Art
Given the investment horizon of 90 days LightInTheBox Holding Co is expected to generate 0.62 times more return on investment than Takung Art. However, LightInTheBox Holding Co is 1.6 times less risky than Takung Art. It trades about -0.03 of its potential returns per unit of risk. Takung Art Co is currently generating about -0.16 per unit of risk. If you would invest 768.00 in LightInTheBox Holding Co on August 27, 2024 and sell it today you would lose (565.00) from holding LightInTheBox Holding Co or give up 73.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 9.38% |
| Values | Daily Returns |
LightInTheBox Holding Co vs. Takung Art Co
Performance |
| Timeline |
| LightInTheBox Holding |
| Takung Art |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
LightInTheBox Holding and Takung Art Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LightInTheBox Holding and Takung Art
The main advantage of trading using opposite LightInTheBox Holding and Takung Art positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LightInTheBox Holding position performs unexpectedly, Takung Art 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 Takung Art will offset losses from the drop in Takung Art's long position.| LightInTheBox Holding vs. Kidpik Corp | LightInTheBox Holding vs. Qurate Retail Series | LightInTheBox Holding vs. Natural Health Trend | LightInTheBox Holding vs. Liquidity Services |
| Takung Art vs. Oriental Culture Holding | Takung Art vs. Dolphin Entertainment | Takung Art vs. Hall of Fame | Takung Art vs. Wisekey International Holding |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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