Correlation Between Lite On and Orient Semiconductor
Can any of the company-specific risk be diversified away by investing in both Lite On and Orient Semiconductor 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 Lite On and Orient Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lite On Technology Corp and Orient Semiconductor Electronics, you can compare the effects of market volatilities on Lite On and Orient Semiconductor 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 Lite On with a short position of Orient Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lite On and Orient Semiconductor.
Diversification Opportunities for Lite On and Orient Semiconductor
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Lite and Orient is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Lite On Technology Corp and Orient Semiconductor Electroni in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orient Semiconductor and Lite On 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 Lite On Technology Corp are associated (or correlated) with Orient Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orient Semiconductor has no effect on the direction of Lite On i.e., Lite On and Orient Semiconductor go up and down completely randomly.
Pair Corralation between Lite On and Orient Semiconductor
Assuming the 90 days trading horizon Lite On is expected to generate 1.3 times less return on investment than Orient Semiconductor. But when comparing it to its historical volatility, Lite On Technology Corp is 1.24 times less risky than Orient Semiconductor. It trades about 0.05 of its potential returns per unit of risk. Orient Semiconductor Electronics is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,095 in Orient Semiconductor Electronics on November 28, 2024 and sell it today you would earn a total of 1,645 from holding Orient Semiconductor Electronics or generate 78.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Lite On Technology Corp vs. Orient Semiconductor Electroni
Performance |
| Timeline |
| Lite On Technology |
| Orient Semiconductor |
Lite On and Orient Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lite On and Orient Semiconductor
The main advantage of trading using opposite Lite On and Orient Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lite On position performs unexpectedly, Orient Semiconductor 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 Orient Semiconductor will offset losses from the drop in Orient Semiconductor's long position.| Lite On vs. Compal Electronics | Lite On vs. Delta Electronics | Lite On vs. Quanta Computer | Lite On vs. Inventec Corp |
| Orient Semiconductor vs. Sunplus Technology Co | Orient Semiconductor vs. Silicon Integrated Systems | Orient Semiconductor vs. Realtek Semiconductor Corp | Orient Semiconductor vs. Elan Microelectronics Corp |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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