Correlation Between Lelon Electronics and Pan Jit
Can any of the company-specific risk be diversified away by investing in both Lelon Electronics and Pan Jit 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 Pan Jit 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 Pan Jit International, you can compare the effects of market volatilities on Lelon Electronics and Pan Jit 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 Pan Jit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lelon Electronics and Pan Jit.
Diversification Opportunities for Lelon Electronics and Pan Jit
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lelon and Pan is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Lelon Electronics Corp and Pan Jit International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pan Jit International 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 Pan Jit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pan Jit International has no effect on the direction of Lelon Electronics i.e., Lelon Electronics and Pan Jit go up and down completely randomly.
Pair Corralation between Lelon Electronics and Pan Jit
Assuming the 90 days trading horizon Lelon Electronics Corp is expected to generate 0.87 times more return on investment than Pan Jit. However, Lelon Electronics Corp is 1.15 times less risky than Pan Jit. It trades about 0.05 of its potential returns per unit of risk. Pan Jit International is currently generating about -0.02 per unit of risk. If you would invest 5,914 in Lelon Electronics Corp on August 31, 2024 and sell it today you would earn a total of 1,676 from holding Lelon Electronics Corp or generate 28.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.74% |
| Values | Daily Returns |
Lelon Electronics Corp vs. Pan Jit International
Performance |
| Timeline |
| Lelon Electronics Corp |
| Pan Jit International |
Lelon Electronics and Pan Jit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lelon Electronics and Pan Jit
The main advantage of trading using opposite Lelon Electronics and Pan Jit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lelon Electronics position performs unexpectedly, Pan Jit 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 Pan Jit will offset losses from the drop in Pan Jit's long position.| Lelon Electronics vs. United Microelectronics | Lelon Electronics vs. Winbond Electronics Corp | Lelon Electronics vs. Macronix International Co |
| Pan Jit vs. United Microelectronics | Pan Jit vs. Winbond Electronics Corp | Pan Jit vs. Macronix International Co |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |