Correlation Between Tencent Holdings and LINE
Can any of the company-specific risk be diversified away by investing in both Tencent Holdings and LINE 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 Tencent Holdings and LINE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tencent Holdings and LINE Corporation, you can compare the effects of market volatilities on Tencent Holdings and LINE 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 Tencent Holdings with a short position of LINE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tencent Holdings and LINE.
Diversification Opportunities for Tencent Holdings and LINE
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Tencent and LINE is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Tencent Holdings Ltd and LINE Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LINE and Tencent Holdings 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 Tencent Holdings are associated (or correlated) with LINE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LINE has no effect on the direction of Tencent Holdings i.e., Tencent Holdings and LINE go up and down completely randomly.
Pair Corralation between Tencent Holdings and LINE
If you would invest 4,237 in Tencent Holdings on December 30, 2023 and sell it today you would lose (334.00) from holding Tencent Holdings or give up 7.88% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
Tencent Holdings Ltd vs. LINE Corp.
Performance |
Timeline |
Tencent Holdings |
LINE |
Risk-Adjusted Performance
0 of 100
Low | High |
Very Weak
Tencent Holdings and LINE Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Tencent Holdings and LINE
The main advantage of trading using opposite Tencent Holdings and LINE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tencent Holdings position performs unexpectedly, LINE 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 LINE will offset losses from the drop in LINE's long position.Tencent Holdings vs. Alphabet Class C | Tencent Holdings vs. Meta Platforms | Tencent Holdings vs. Tencent Holdings | Tencent Holdings vs. Prosus |
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 Channel module to use Commodity Channel Index to analyze current equity momentum.
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