Correlation Between Yeong Guan and Lemtech Holdings
Can any of the company-specific risk be diversified away by investing in both Yeong Guan and Lemtech Holdings 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 Yeong Guan and Lemtech Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yeong Guan Energy and Lemtech Holdings Co, you can compare the effects of market volatilities on Yeong Guan and Lemtech Holdings 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 Yeong Guan with a short position of Lemtech Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yeong Guan and Lemtech Holdings.
Diversification Opportunities for Yeong Guan and Lemtech Holdings
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Yeong and Lemtech is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Yeong Guan Energy and Lemtech Holdings Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lemtech Holdings and Yeong Guan 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 Yeong Guan Energy are associated (or correlated) with Lemtech Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lemtech Holdings has no effect on the direction of Yeong Guan i.e., Yeong Guan and Lemtech Holdings go up and down completely randomly.
Pair Corralation between Yeong Guan and Lemtech Holdings
Assuming the 90 days trading horizon Yeong Guan Energy is expected to under-perform the Lemtech Holdings. In addition to that, Yeong Guan is 1.23 times more volatile than Lemtech Holdings Co. It trades about -0.04 of its total potential returns per unit of risk. Lemtech Holdings Co is currently generating about 0.06 per unit of volatility. If you would invest 10,500 in Lemtech Holdings Co on August 24, 2024 and sell it today you would earn a total of 200.00 from holding Lemtech Holdings Co or generate 1.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yeong Guan Energy vs. Lemtech Holdings Co
Performance |
| Timeline |
| Yeong Guan Energy |
| Lemtech Holdings |
Yeong Guan and Lemtech Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yeong Guan and Lemtech Holdings
The main advantage of trading using opposite Yeong Guan and Lemtech Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yeong Guan position performs unexpectedly, Lemtech Holdings 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 Lemtech Holdings will offset losses from the drop in Lemtech Holdings' long position.| Yeong Guan vs. TECO Electric Machinery | Yeong Guan vs. Swancor Holding Co | Yeong Guan vs. Airtac International Group | Yeong Guan vs. Grape King Bio |
| Lemtech Holdings vs. Primax Electronics | Lemtech Holdings vs. Nishoku Technology | Lemtech Holdings vs. Shin Zu Shing | Lemtech Holdings vs. Generalplus Technology |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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