Correlation Between Lien Hwa and Getac Technology
Can any of the company-specific risk be diversified away by investing in both Lien Hwa and Getac Technology 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 Lien Hwa and Getac Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lien Hwa Industrial and Getac Technology Corp, you can compare the effects of market volatilities on Lien Hwa and Getac Technology 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 Lien Hwa with a short position of Getac Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lien Hwa and Getac Technology.
Diversification Opportunities for Lien Hwa and Getac Technology
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lien and Getac is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Lien Hwa Industrial and Getac Technology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Getac Technology Corp and Lien Hwa 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 Lien Hwa Industrial are associated (or correlated) with Getac Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Getac Technology Corp has no effect on the direction of Lien Hwa i.e., Lien Hwa and Getac Technology go up and down completely randomly.
Pair Corralation between Lien Hwa and Getac Technology
Assuming the 90 days trading horizon Lien Hwa is expected to generate 1.5 times less return on investment than Getac Technology. But when comparing it to its historical volatility, Lien Hwa Industrial is 1.27 times less risky than Getac Technology. It trades about 0.17 of its potential returns per unit of risk. Getac Technology Corp is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 11,950 in Getac Technology Corp on November 28, 2024 and sell it today you would earn a total of 600.00 from holding Getac Technology Corp or generate 5.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
Lien Hwa Industrial vs. Getac Technology Corp
Performance |
| Timeline |
| Lien Hwa Industrial |
| Getac Technology Corp |
Lien Hwa and Getac Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lien Hwa and Getac Technology
The main advantage of trading using opposite Lien Hwa and Getac Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lien Hwa position performs unexpectedly, Getac Technology 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 Getac Technology will offset losses from the drop in Getac Technology's long position.| Lien Hwa vs. Great Wall Enterprise | Lien Hwa vs. Lian Hwa Foods | Lien Hwa vs. Charoen Pokphand Enterprise | Lien Hwa vs. Uni President Enterprises Corp |
| Getac Technology vs. Chicony Electronics Co | Getac Technology vs. Inventec Corp | Getac Technology vs. Synnex Technology International | Getac Technology vs. Micro Star International Co |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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