Correlation Between Lingsen Precision and Macronix International
Can any of the company-specific risk be diversified away by investing in both Lingsen Precision and Macronix International 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 Lingsen Precision and Macronix International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lingsen Precision Industries and Macronix International Co, you can compare the effects of market volatilities on Lingsen Precision and Macronix International 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 Lingsen Precision with a short position of Macronix International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lingsen Precision and Macronix International.
Diversification Opportunities for Lingsen Precision and Macronix International
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Lingsen and Macronix is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Lingsen Precision Industries and Macronix International Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macronix International and Lingsen Precision 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 Lingsen Precision Industries are associated (or correlated) with Macronix International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macronix International has no effect on the direction of Lingsen Precision i.e., Lingsen Precision and Macronix International go up and down completely randomly.
Pair Corralation between Lingsen Precision and Macronix International
Assuming the 90 days trading horizon Lingsen Precision Industries is expected to generate 0.93 times more return on investment than Macronix International. However, Lingsen Precision Industries is 1.08 times less risky than Macronix International. It trades about -0.12 of its potential returns per unit of risk. Macronix International Co is currently generating about -0.27 per unit of risk. If you would invest 1,920 in Lingsen Precision Industries on September 1, 2024 and sell it today you would lose (115.00) from holding Lingsen Precision Industries or give up 5.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lingsen Precision Industries vs. Macronix International Co
Performance |
| Timeline |
| Lingsen Precision |
| Macronix International |
Lingsen Precision and Macronix International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lingsen Precision and Macronix International
The main advantage of trading using opposite Lingsen Precision and Macronix International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lingsen Precision position performs unexpectedly, Macronix International 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 Macronix International will offset losses from the drop in Macronix International's long position.The idea behind Lingsen Precision Industries and Macronix International Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Macronix International vs. United Microelectronics | Macronix International vs. Winbond Electronics 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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