Correlation Between Luk Fook and Allovir

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Can any of the company-specific risk be diversified away by investing in both Luk Fook and Allovir 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 Luk Fook and Allovir into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Luk Fook Holdings and Allovir, you can compare the effects of market volatilities on Luk Fook and Allovir 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 Luk Fook with a short position of Allovir. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luk Fook and Allovir.

Diversification Opportunities for Luk Fook and Allovir

0.05
  Correlation Coefficient

Significant diversification

The 3 months correlation between LKFLF and Allovir is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Luk Fook Holdings and Allovir in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allovir and Luk Fook 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 Luk Fook Holdings are associated (or correlated) with Allovir. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allovir has no effect on the direction of Luk Fook i.e., Luk Fook and Allovir go up and down completely randomly.

Pair Corralation between Luk Fook and Allovir

Assuming the 90 days horizon Luk Fook Holdings is expected to generate 3.25 times more return on investment than Allovir. However, Luk Fook is 3.25 times more volatile than Allovir. It trades about 0.09 of its potential returns per unit of risk. Allovir is currently generating about -0.04 per unit of risk. If you would invest  158.00  in Luk Fook Holdings on August 29, 2022 and sell it today you would earn a total of  62.00  from holding Luk Fook Holdings or generate 39.24% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy99.79%
ValuesDaily Returns

Luk Fook Holdings  vs.  Allovir

 Performance (%) 
       Timeline  
Luk Fook Holdings 
LKFLF Performance
0 of 100
Over the last 90 days Luk Fook Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's essential indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

LKFLF Price Channel

Allovir 
Allovir Performance
2 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Allovir are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting basic indicators, Allovir may actually be approaching a critical reversion point that can send shares even higher in December 2022.

Allovir Price Channel

Luk Fook and Allovir Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Luk Fook and Allovir

The main advantage of trading using opposite Luk Fook and Allovir positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luk Fook position performs unexpectedly, Allovir 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 Allovir will offset losses from the drop in Allovir's long position.
Luk Fook vs. Hermes Intl SA
The idea behind Luk Fook Holdings and Allovir pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.

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