Correlation Between Lien Chang and Ingentec
Can any of the company-specific risk be diversified away by investing in both Lien Chang and Ingentec 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 Lien Chang and Ingentec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lien Chang Electronic and Ingentec, you can compare the effects of market volatilities on Lien Chang and Ingentec 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 Lien Chang with a short position of Ingentec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lien Chang and Ingentec.
Diversification Opportunities for Lien Chang and Ingentec
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lien and Ingentec is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Lien Chang Electronic and Ingentec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ingentec and Lien Chang 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 Lien Chang Electronic are associated (or correlated) with Ingentec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ingentec has no effect on the direction of Lien Chang i.e., Lien Chang and Ingentec go up and down completely randomly.
Pair Corralation between Lien Chang and Ingentec
Assuming the 90 days trading horizon Lien Chang Electronic is expected to under-perform the Ingentec. In addition to that, Lien Chang is 1.52 times more volatile than Ingentec. It trades about -0.4 of its total potential returns per unit of risk. Ingentec is currently generating about -0.32 per unit of volatility. If you would invest 19,850 in Ingentec on September 22, 2024 and sell it today you would lose (2,350) from holding Ingentec or give up 11.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lien Chang Electronic vs. Ingentec
Performance |
| Timeline |
| Lien Chang Electronic |
| Ingentec |
Lien Chang and Ingentec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lien Chang and Ingentec
The main advantage of trading using opposite Lien Chang and Ingentec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lien Chang position performs unexpectedly, Ingentec 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 Ingentec will offset losses from the drop in Ingentec's long position.| Lien Chang vs. Century Wind Power | Lien Chang vs. Green World Fintech | Lien Chang vs. Ingentec | Lien Chang vs. Chaheng Precision Co |
| Ingentec vs. Chung Hwa Food | Ingentec vs. Standard Foods Corp | Ingentec vs. WT Microelectronics Co | Ingentec vs. Lien Chang Electronic |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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