Correlation Between Lien Chang and Ever Clear
Can any of the company-specific risk be diversified away by investing in both Lien Chang and Ever Clear 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 Lien Chang and Ever Clear into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lien Chang Electronic and Ever Clear Environmental Eng, you can compare the effects of market volatilities on Lien Chang and Ever Clear 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 Lien Chang with a short position of Ever Clear. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lien Chang and Ever Clear.
Diversification Opportunities for Lien Chang and Ever Clear
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lien and Ever is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Lien Chang Electronic and Ever Clear Environmental Eng in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ever Clear Environme and Lien Chang 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 Lien Chang Electronic are associated (or correlated) with Ever Clear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ever Clear Environme has no effect on the direction of Lien Chang i.e., Lien Chang and Ever Clear go up and down completely randomly.
Pair Corralation between Lien Chang and Ever Clear
Assuming the 90 days trading horizon Lien Chang Electronic is expected to generate 1.63 times more return on investment than Ever Clear. However, Lien Chang is 1.63 times more volatile than Ever Clear Environmental Eng. It trades about 0.01 of its potential returns per unit of risk. Ever Clear Environmental Eng is currently generating about -0.03 per unit of risk. If you would invest 1,260 in Lien Chang Electronic on February 7, 2024 and sell it today you would lose (10.00) from holding Lien Chang Electronic or give up 0.79% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Lien Chang Electronic vs. Ever Clear Environmental Eng
Performance |
Timeline |
Lien Chang Electronic |
Ever Clear Environme |
Lien Chang and Ever Clear Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Lien Chang and Ever Clear
The main advantage of trading using opposite Lien Chang and Ever Clear positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lien Chang position performs unexpectedly, Ever Clear 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 Ever Clear will offset losses from the drop in Ever Clear's long position.Lien Chang vs. LARGAN Precision Co | Lien Chang vs. Evergreen Marine Corp | Lien Chang vs. MediaTek | Lien Chang vs. Yang Ming Marine |
Ever Clear vs. Landis Taipei Hotel | Ever Clear vs. Hi Lai Foods Co | Ever Clear vs. Standard Foods Corp | Ever Clear vs. Farglory Life Insurance |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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