Correlation Between Lelon Electronics and TA I
Can any of the company-specific risk be diversified away by investing in both Lelon Electronics and TA I 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 Lelon Electronics and TA I into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lelon Electronics Corp and TA I Technology Co, you can compare the effects of market volatilities on Lelon Electronics and TA I 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 Lelon Electronics with a short position of TA I. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lelon Electronics and TA I.
Diversification Opportunities for Lelon Electronics and TA I
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Lelon and 2478 is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Lelon Electronics Corp and TA I Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TA I Technology and Lelon Electronics 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 Lelon Electronics Corp are associated (or correlated) with TA I. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TA I Technology has no effect on the direction of Lelon Electronics i.e., Lelon Electronics and TA I go up and down completely randomly.
Pair Corralation between Lelon Electronics and TA I
Assuming the 90 days trading horizon Lelon Electronics Corp is expected to generate 1.15 times more return on investment than TA I. However, Lelon Electronics is 1.15 times more volatile than TA I Technology Co. It trades about 0.0 of its potential returns per unit of risk. TA I Technology Co is currently generating about -0.05 per unit of risk. If you would invest 7,750 in Lelon Electronics Corp on August 30, 2024 and sell it today you would lose (160.00) from holding Lelon Electronics Corp or give up 2.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lelon Electronics Corp vs. TA I Technology Co
Performance |
| Timeline |
| Lelon Electronics Corp |
| TA I Technology |
Lelon Electronics and TA I Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lelon Electronics and TA I
The main advantage of trading using opposite Lelon Electronics and TA I positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lelon Electronics position performs unexpectedly, TA I 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 TA I will offset losses from the drop in TA I's long position.| Lelon Electronics vs. TA I Technology Co | Lelon Electronics vs. Walsin Technology Corp | Lelon Electronics vs. Greatek Electronics | Lelon Electronics vs. Pan Jit International |
| TA I vs. Walsin Technology Corp | TA I vs. Lelon Electronics Corp | TA I vs. Yageo Corp | TA I 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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