Correlation Between Leaders Technology and Samlip General
Can any of the company-specific risk be diversified away by investing in both Leaders Technology and Samlip General 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 Samlip General 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 Samlip General Foods, you can compare the effects of market volatilities on Leaders Technology and Samlip General 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 Samlip General. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leaders Technology and Samlip General.
Diversification Opportunities for Leaders Technology and Samlip General
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Leaders and Samlip is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Leaders Technology Investment and Samlip General Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samlip General 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 Samlip General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samlip General Foods has no effect on the direction of Leaders Technology i.e., Leaders Technology and Samlip General go up and down completely randomly.
Pair Corralation between Leaders Technology and Samlip General
Assuming the 90 days trading horizon Leaders Technology is expected to generate 2.9 times less return on investment than Samlip General. In addition to that, Leaders Technology is 1.51 times more volatile than Samlip General Foods. It trades about 0.04 of its total potential returns per unit of risk. Samlip General Foods is currently generating about 0.16 per unit of volatility. If you would invest 4,747,290 in Samlip General Foods on October 14, 2024 and sell it today you would earn a total of 332,710 from holding Samlip General Foods or generate 7.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Leaders Technology Investment vs. Samlip General Foods
Performance |
| Timeline |
| Leaders Technology |
| Samlip General Foods |
Leaders Technology and Samlip General Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leaders Technology and Samlip General
The main advantage of trading using opposite Leaders Technology and Samlip General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leaders Technology position performs unexpectedly, Samlip General 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 Samlip General will offset losses from the drop in Samlip General's long position.| Leaders Technology vs. Samlip General Foods | Leaders Technology vs. Sam Yang Foods | Leaders Technology vs. Daejung Chemicals Metals | Leaders Technology vs. Sajo Seafood |
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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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