Correlation Between Hi Lai and Ligitek Electronics
Can any of the company-specific risk be diversified away by investing in both Hi Lai and Ligitek Electronics 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 Hi Lai and Ligitek Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hi Lai Foods Co and Ligitek Electronics Co, you can compare the effects of market volatilities on Hi Lai and Ligitek Electronics 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 Hi Lai with a short position of Ligitek Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hi Lai and Ligitek Electronics.
Diversification Opportunities for Hi Lai and Ligitek Electronics
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 1268 and Ligitek is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Hi Lai Foods Co and Ligitek Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ligitek Electronics and Hi Lai 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 Hi Lai Foods Co are associated (or correlated) with Ligitek Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ligitek Electronics has no effect on the direction of Hi Lai i.e., Hi Lai and Ligitek Electronics go up and down completely randomly.
Pair Corralation between Hi Lai and Ligitek Electronics
Assuming the 90 days trading horizon Hi Lai Foods Co is expected to generate 0.16 times more return on investment than Ligitek Electronics. However, Hi Lai Foods Co is 6.18 times less risky than Ligitek Electronics. It trades about -0.19 of its potential returns per unit of risk. Ligitek Electronics Co is currently generating about -0.07 per unit of risk. If you would invest 15,350 in Hi Lai Foods Co on September 5, 2024 and sell it today you would lose (350.00) from holding Hi Lai Foods Co or give up 2.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hi Lai Foods Co vs. Ligitek Electronics Co
Performance |
| Timeline |
| Hi Lai Foods |
| Ligitek Electronics |
Hi Lai and Ligitek Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hi Lai and Ligitek Electronics
The main advantage of trading using opposite Hi Lai and Ligitek Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hi Lai position performs unexpectedly, Ligitek Electronics 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 Ligitek Electronics will offset losses from the drop in Ligitek Electronics' long position.| Hi Lai vs. Ligitek Electronics Co | Hi Lai vs. U Ming Marine Transport | Hi Lai vs. Wei Chuan Foods | Hi Lai vs. Excellence Optoelectronic |
| Ligitek Electronics vs. Hon Hai Precision | Ligitek Electronics vs. Delta Electronics | Ligitek Electronics vs. LARGAN Precision Co | Ligitek Electronics vs. AU Optronics |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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