Correlation Between Weiss Korea and Liechtensteinische
Can any of the company-specific risk be diversified away by investing in both Weiss Korea and Liechtensteinische 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 Weiss Korea and Liechtensteinische into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Weiss Korea Opportunity and Liechtensteinische Landesbank AG, you can compare the effects of market volatilities on Weiss Korea and Liechtensteinische 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 Weiss Korea with a short position of Liechtensteinische. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weiss Korea and Liechtensteinische.
Diversification Opportunities for Weiss Korea and Liechtensteinische
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Weiss and Liechtensteinische is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Weiss Korea Opportunity and Liechtensteinische Landesbank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liechtensteinische and Weiss Korea 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 Weiss Korea Opportunity are associated (or correlated) with Liechtensteinische. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liechtensteinische has no effect on the direction of Weiss Korea i.e., Weiss Korea and Liechtensteinische go up and down completely randomly.
Pair Corralation between Weiss Korea and Liechtensteinische
Assuming the 90 days trading horizon Weiss Korea Opportunity is expected to under-perform the Liechtensteinische. In addition to that, Weiss Korea is 2.57 times more volatile than Liechtensteinische Landesbank AG. It trades about -0.38 of its total potential returns per unit of risk. Liechtensteinische Landesbank AG is currently generating about -0.19 per unit of volatility. If you would invest 7,080 in Liechtensteinische Landesbank AG on September 12, 2024 and sell it today you would lose (210.00) from holding Liechtensteinische Landesbank AG or give up 2.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Weiss Korea Opportunity vs. Liechtensteinische Landesbank
Performance |
| Timeline |
| Weiss Korea Opportunity |
| Liechtensteinische |
Weiss Korea and Liechtensteinische Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weiss Korea and Liechtensteinische
The main advantage of trading using opposite Weiss Korea and Liechtensteinische positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weiss Korea position performs unexpectedly, Liechtensteinische 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 Liechtensteinische will offset losses from the drop in Liechtensteinische's long position.| Weiss Korea vs. Samsung Electronics Co | Weiss Korea vs. Samsung Electronics Co | Weiss Korea vs. Hyundai Motor | Weiss Korea vs. Toyota Motor Corp |
| Liechtensteinische vs. Bisichi Mining PLC | Liechtensteinische vs. Silvercorp Metals | Liechtensteinische vs. Caledonia Mining | Liechtensteinische vs. European Metals Holdings |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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