Correlation Between Macronix International and Lelon Electronics
Can any of the company-specific risk be diversified away by investing in both Macronix International and Lelon 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 Macronix International and Lelon Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Macronix International Co and Lelon Electronics Corp, you can compare the effects of market volatilities on Macronix International and Lelon 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 Macronix International with a short position of Lelon Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macronix International and Lelon Electronics.
Diversification Opportunities for Macronix International and Lelon Electronics
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Macronix and Lelon is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Macronix International Co and Lelon Electronics Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lelon Electronics Corp and Macronix International 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 Macronix International Co are associated (or correlated) with Lelon Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lelon Electronics Corp has no effect on the direction of Macronix International i.e., Macronix International and Lelon Electronics go up and down completely randomly.
Pair Corralation between Macronix International and Lelon Electronics
Assuming the 90 days trading horizon Macronix International Co is expected to under-perform the Lelon Electronics. In addition to that, Macronix International is 1.24 times more volatile than Lelon Electronics Corp. It trades about -0.22 of its total potential returns per unit of risk. Lelon Electronics Corp is currently generating about -0.01 per unit of volatility. If you would invest 8,020 in Lelon Electronics Corp on September 2, 2024 and sell it today you would lose (160.00) from holding Lelon Electronics Corp or give up 2.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Macronix International Co vs. Lelon Electronics Corp
Performance |
| Timeline |
| Macronix International |
| Lelon Electronics Corp |
Macronix International and Lelon Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macronix International and Lelon Electronics
The main advantage of trading using opposite Macronix International and Lelon Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macronix International position performs unexpectedly, Lelon 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 Lelon Electronics will offset losses from the drop in Lelon Electronics' long position.| Macronix International vs. Winbond Electronics Corp | Macronix International vs. United Microelectronics | Macronix International vs. Mosel Vitelic | Macronix International vs. VIA Technologies |
| Lelon Electronics vs. TA I Technology Co | Lelon Electronics vs. Walsin Technology Corp | Lelon Electronics vs. Greatek Electronics | Lelon Electronics vs. Pan Jit International |
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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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