Correlation Between Lelon Electronics and Vate Technology
Can any of the company-specific risk be diversified away by investing in both Lelon Electronics and Vate Technology 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 Vate Technology 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 Vate Technology Co, you can compare the effects of market volatilities on Lelon Electronics and Vate Technology 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 Vate Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lelon Electronics and Vate Technology.
Diversification Opportunities for Lelon Electronics and Vate Technology
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lelon and Vate is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Lelon Electronics Corp and Vate Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vate 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 Vate Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vate Technology has no effect on the direction of Lelon Electronics i.e., Lelon Electronics and Vate Technology go up and down completely randomly.
Pair Corralation between Lelon Electronics and Vate Technology
Assuming the 90 days trading horizon Lelon Electronics Corp is expected to generate 1.18 times more return on investment than Vate Technology. However, Lelon Electronics is 1.18 times more volatile than Vate Technology Co. It trades about 0.36 of its potential returns per unit of risk. Vate Technology Co is currently generating about -0.23 per unit of risk. If you would invest 7,200 in Lelon Electronics Corp on September 5, 2024 and sell it today you would earn a total of 980.00 from holding Lelon Electronics Corp or generate 13.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lelon Electronics Corp vs. Vate Technology Co
Performance |
| Timeline |
| Lelon Electronics Corp |
| Vate Technology |
Lelon Electronics and Vate Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lelon Electronics and Vate Technology
The main advantage of trading using opposite Lelon Electronics and Vate Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lelon Electronics position performs unexpectedly, Vate Technology 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 Vate Technology will offset losses from the drop in Vate Technology's long position.| Lelon Electronics vs. Taiwan Semiconductor Manufacturing | Lelon Electronics vs. Yang Ming Marine | Lelon Electronics vs. AU Optronics | Lelon Electronics vs. Nan Ya Plastics |
| Vate Technology vs. An Shin Food Services | Vate Technology vs. X Legend Entertainment Co | Vate Technology vs. Orient Semiconductor Electronics | Vate Technology vs. Winstek Semiconductor 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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