Correlation Between Round One and Li Ning
Can any of the company-specific risk be diversified away by investing in both Round One and Li Ning 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 Round One and Li Ning into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Round One and Li Ning Company, you can compare the effects of market volatilities on Round One and Li Ning 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 Round One with a short position of Li Ning. Check out your portfolio center. Please also check ongoing floating volatility patterns of Round One and Li Ning.
Diversification Opportunities for Round One and Li Ning
Pay attention - limited upside
The 3 months correlation between Round and LNLB is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Round One and Li Ning Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Li Ning Company and Round One 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 Round One are associated (or correlated) with Li Ning. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Li Ning Company has no effect on the direction of Round One i.e., Round One and Li Ning go up and down completely randomly.
Pair Corralation between Round One and Li Ning
If you would invest 165.00 in Li Ning Company on September 2, 2024 and sell it today you would earn a total of 27.00 from holding Li Ning Company or generate 16.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.23% |
| Values | Daily Returns |
Round One vs. Li Ning Company
Performance |
| Timeline |
| Round One |
| Li Ning Company |
Round One and Li Ning Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Round One and Li Ning
The main advantage of trading using opposite Round One and Li Ning positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Round One position performs unexpectedly, Li Ning 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 Li Ning will offset losses from the drop in Li Ning's long position.| Round One vs. Amkor Technology | Round One vs. Check Point Software | Round One vs. DXC Technology Co | Round One vs. Align Technology |
| Li Ning vs. Global Ship Lease | Li Ning vs. Perseus Mining Limited | Li Ning vs. Playtech plc | Li Ning vs. Uber Technologies |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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