Correlation Between Leaders Technology and Sam Yang
Can any of the company-specific risk be diversified away by investing in both Leaders Technology and Sam Yang 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 Leaders Technology and Sam Yang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leaders Technology Investment and Sam Yang Foods, you can compare the effects of market volatilities on Leaders Technology and Sam Yang 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 Leaders Technology with a short position of Sam Yang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leaders Technology and Sam Yang.
Diversification Opportunities for Leaders Technology and Sam Yang
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Leaders and Sam is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Leaders Technology Investment and Sam Yang Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sam Yang Foods and Leaders Technology 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 Leaders Technology Investment are associated (or correlated) with Sam Yang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sam Yang Foods has no effect on the direction of Leaders Technology i.e., Leaders Technology and Sam Yang go up and down completely randomly.
Pair Corralation between Leaders Technology and Sam Yang
Assuming the 90 days trading horizon Leaders Technology Investment is expected to generate 1.51 times more return on investment than Sam Yang. However, Leaders Technology is 1.51 times more volatile than Sam Yang Foods. It trades about 0.01 of its potential returns per unit of risk. Sam Yang Foods is currently generating about -0.19 per unit of risk. If you would invest 26,800 in Leaders Technology Investment on October 29, 2024 and sell it today you would earn a total of 0.00 from holding Leaders Technology Investment or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Leaders Technology Investment vs. Sam Yang Foods
Performance |
| Timeline |
| Leaders Technology |
| Sam Yang Foods |
Leaders Technology and Sam Yang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leaders Technology and Sam Yang
The main advantage of trading using opposite Leaders Technology and Sam Yang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leaders Technology position performs unexpectedly, Sam Yang 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 Sam Yang will offset losses from the drop in Sam Yang's long position.| Leaders Technology vs. Lion Chemtech Co | Leaders Technology vs. Cuckoo Homesys Co | Leaders Technology vs. PNC Technologies co | Leaders Technology vs. Shinhan Inverse Silver |
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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 the Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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