Correlation Between Lion Chemtech and Techwing
Can any of the company-specific risk be diversified away by investing in both Lion Chemtech and Techwing 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 Lion Chemtech and Techwing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lion Chemtech Co and Techwing, you can compare the effects of market volatilities on Lion Chemtech and Techwing 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 Lion Chemtech with a short position of Techwing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion Chemtech and Techwing.
Diversification Opportunities for Lion Chemtech and Techwing
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lion and Techwing is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Lion Chemtech Co and Techwing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Techwing and Lion Chemtech 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 Lion Chemtech Co are associated (or correlated) with Techwing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Techwing has no effect on the direction of Lion Chemtech i.e., Lion Chemtech and Techwing go up and down completely randomly.
Pair Corralation between Lion Chemtech and Techwing
Assuming the 90 days trading horizon Lion Chemtech Co is expected to under-perform the Techwing. But the stock apears to be less risky and, when comparing its historical volatility, Lion Chemtech Co is 1.3 times less risky than Techwing. The stock trades about 0.0 of its potential returns per unit of risk. The Techwing is currently generating about 0.12 of returns per unit of risk over similar time horizon. 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 |
Lion Chemtech Co vs. Techwing
Performance |
| Timeline |
| Lion Chemtech |
| Techwing |
Lion Chemtech and Techwing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion Chemtech and Techwing
The main advantage of trading using opposite Lion Chemtech and Techwing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion Chemtech position performs unexpectedly, Techwing 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 Techwing will offset losses from the drop in Techwing's long position.| Lion Chemtech vs. Worldex Industry Trading | Lion Chemtech vs. Daol Investment Securities | Lion Chemtech vs. Coloray International Investment | Lion Chemtech vs. Sangsangin Investment Securities |
| Techwing vs. Samhyun Steel Co | Techwing vs. Global Standard Technology | Techwing vs. Bosung Power Technology | Techwing vs. Digital Imaging 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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