Correlation Between Techwing and Lion Chemtech
Can any of the company-specific risk be diversified away by investing in both Techwing and Lion Chemtech 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 Techwing and Lion Chemtech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Techwing and Lion Chemtech Co, you can compare the effects of market volatilities on Techwing and Lion Chemtech 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 Techwing with a short position of Lion Chemtech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Techwing and Lion Chemtech.
Diversification Opportunities for Techwing and Lion Chemtech
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Techwing and Lion is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Techwing and Lion Chemtech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lion Chemtech and Techwing 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 Techwing are associated (or correlated) with Lion Chemtech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lion Chemtech has no effect on the direction of Techwing i.e., Techwing and Lion Chemtech go up and down completely randomly.
Pair Corralation between Techwing and Lion Chemtech
Assuming the 90 days trading horizon Techwing is expected to generate 1.3 times more return on investment than Lion Chemtech. However, Techwing is 1.3 times more volatile than Lion Chemtech Co. It trades about 0.12 of its potential returns per unit of risk. Lion Chemtech Co is currently generating about 0.0 per unit of risk. If you would invest 625,580 in Techwing on November 2, 2024 and sell it today you would earn a total of 4,324,420 from holding Techwing or generate 691.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Techwing vs. Lion Chemtech Co
Performance |
| Timeline |
| Techwing |
| Lion Chemtech |
Techwing and Lion Chemtech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Techwing and Lion Chemtech
The main advantage of trading using opposite Techwing and Lion Chemtech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Techwing position performs unexpectedly, Lion Chemtech 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 Lion Chemtech will offset losses from the drop in Lion Chemtech's long position.| Techwing vs. Samhyun Steel Co | Techwing vs. Global Standard Technology | Techwing vs. Bosung Power Technology | Techwing vs. Digital Imaging Technology |
| Lion Chemtech vs. Worldex Industry Trading | Lion Chemtech vs. Daol Investment Securities | Lion Chemtech vs. Coloray International Investment | Lion Chemtech vs. Sangsangin Investment Securities |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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