Correlation Between TONGDAO LIEPGR and Recruit Holdings

Can any of the company-specific risk be diversified away by investing in both TONGDAO LIEPGR and Recruit Holdings 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 TONGDAO LIEPGR and Recruit Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between TONGDAO LIEPGR DL 0001 and Recruit Holdings Co, you can compare the effects of market volatilities on TONGDAO LIEPGR and Recruit Holdings 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 TONGDAO LIEPGR with a short position of Recruit Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of TONGDAO LIEPGR and Recruit Holdings.

Diversification Opportunities for TONGDAO LIEPGR and Recruit Holdings

-0.54

Correlation Coefficient

TONGDAO LIEPGR  Recruit Holdings

Excellent diversification

The 3 months correlation between TONGDAO and Recruit is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding TONGDAO LIEPGR DL 0001 and Recruit Holdings Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Recruit Holdings and TONGDAO LIEPGR 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 TONGDAO LIEPGR DL 0001 are associated (or correlated) with Recruit Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Recruit Holdings has no effect on the direction of TONGDAO LIEPGR i.e., TONGDAO LIEPGR and Recruit Holdings go up and down completely randomly.

Pair Corralation between TONGDAO LIEPGR and Recruit Holdings

Assuming the 90 days horizon TONGDAO LIEPGR DL 0001 is expected to generate 2.16 times more return on investment than Recruit Holdings. However, TONGDAO LIEPGR is 2.16 times more volatile than Recruit Holdings Co. It trades about 0.06 of its potential returns per unit of risk. Recruit Holdings Co is currently generating about 0.04 per unit of risk. If you would invest  38.00  in TONGDAO LIEPGR DL 0001 on April 24, 2025 and sell it today you would earn a total of  5.00  from holding TONGDAO LIEPGR DL 0001 or generate 13.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

TONGDAO LIEPGR DL 0001  vs.  Recruit Holdings Co

TONGDAO LIEPGR DL

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in TONGDAO LIEPGR DL 0001 are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, TONGDAO LIEPGR reported solid returns over the last few months and may actually be approaching a breakup point.

Recruit Holdings

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Recruit Holdings Co are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Recruit Holdings may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with TONGDAO LIEPGR and Recruit Holdings

The main advantage of trading using opposite TONGDAO LIEPGR and Recruit Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TONGDAO LIEPGR position performs unexpectedly, Recruit Holdings 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 Recruit Holdings will offset losses from the drop in Recruit Holdings' long position.

The idea behind TONGDAO LIEPGR DL 0001 and Recruit Holdings Co 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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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.