Correlation Between Gigastorage Corp and Ledtech Electronics
Can any of the company-specific risk be diversified away by investing in both Gigastorage Corp and Ledtech 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 Gigastorage Corp and Ledtech Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gigastorage Corp and Ledtech Electronics Corp, you can compare the effects of market volatilities on Gigastorage Corp and Ledtech 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 Gigastorage Corp with a short position of Ledtech Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gigastorage Corp and Ledtech Electronics.
Diversification Opportunities for Gigastorage Corp and Ledtech Electronics
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Gigastorage and Ledtech is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Gigastorage Corp and Ledtech Electronics Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ledtech Electronics Corp and Gigastorage Corp 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 Gigastorage Corp are associated (or correlated) with Ledtech Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ledtech Electronics Corp has no effect on the direction of Gigastorage Corp i.e., Gigastorage Corp and Ledtech Electronics go up and down completely randomly.
Pair Corralation between Gigastorage Corp and Ledtech Electronics
Assuming the 90 days trading horizon Gigastorage Corp is expected to generate 2.39 times more return on investment than Ledtech Electronics. However, Gigastorage Corp is 2.39 times more volatile than Ledtech Electronics Corp. It trades about 0.43 of its potential returns per unit of risk. Ledtech Electronics Corp is currently generating about 0.27 per unit of risk. If you would invest 1,335 in Gigastorage Corp on November 28, 2024 and sell it today you would earn a total of 185.00 from holding Gigastorage Corp or generate 13.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gigastorage Corp vs. Ledtech Electronics Corp
Performance |
| Timeline |
| Gigastorage Corp |
| Ledtech Electronics Corp |
Gigastorage Corp and Ledtech Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gigastorage Corp and Ledtech Electronics
The main advantage of trading using opposite Gigastorage Corp and Ledtech Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gigastorage Corp position performs unexpectedly, Ledtech 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 Ledtech Electronics will offset losses from the drop in Ledtech Electronics' long position.| Gigastorage Corp vs. Chumpower Machinery Corp | Gigastorage Corp vs. Da Cin Construction Co | Gigastorage Corp vs. Ruentex Engineering Construction | Gigastorage Corp vs. Jia Jie Biomedical |
| Ledtech Electronics vs. Sunplus Technology Co | Ledtech Electronics vs. Silicon Integrated Systems | Ledtech Electronics vs. Realtek Semiconductor Corp | Ledtech Electronics 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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