Correlation Between Leaders Technology and BIT Computer
Can any of the company-specific risk be diversified away by investing in both Leaders Technology and BIT Computer 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 BIT Computer 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 BIT Computer Co, you can compare the effects of market volatilities on Leaders Technology and BIT Computer 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 BIT Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leaders Technology and BIT Computer.
Diversification Opportunities for Leaders Technology and BIT Computer
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Leaders and BIT is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Leaders Technology Investment and BIT Computer Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BIT Computer 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 BIT Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BIT Computer has no effect on the direction of Leaders Technology i.e., Leaders Technology and BIT Computer go up and down completely randomly.
Pair Corralation between Leaders Technology and BIT Computer
Assuming the 90 days trading horizon Leaders Technology Investment is expected to under-perform the BIT Computer. In addition to that, Leaders Technology is 2.05 times more volatile than BIT Computer Co. It trades about -0.03 of its total potential returns per unit of risk. BIT Computer Co is currently generating about -0.04 per unit of volatility. If you would invest 668,401 in BIT Computer Co on November 3, 2024 and sell it today you would lose (182,901) from holding BIT Computer Co or give up 27.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.58% |
| Values | Daily Returns |
Leaders Technology Investment vs. BIT Computer Co
Performance |
| Timeline |
| Leaders Technology |
| BIT Computer |
Leaders Technology and BIT Computer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leaders Technology and BIT Computer
The main advantage of trading using opposite Leaders Technology and BIT Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leaders Technology position performs unexpectedly, BIT Computer 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 BIT Computer will offset losses from the drop in BIT Computer's long position.| Leaders Technology vs. Koryo Credit Information | Leaders Technology vs. Dongbu Insurance Co | Leaders Technology vs. Daewoo Engineering Construction | Leaders Technology vs. Asiana Airlines |
| BIT Computer vs. Dongwoo Farm To | BIT Computer vs. Cuckoo Homesys Co | BIT Computer vs. Keyang Electric Machinery | BIT Computer vs. KT Submarine Telecom |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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