Correlation Between LARGAN Precision and Hiwin Technologies
Can any of the company-specific risk be diversified away by investing in both LARGAN Precision and Hiwin Technologies 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 LARGAN Precision and Hiwin Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LARGAN Precision Co and Hiwin Technologies Corp, you can compare the effects of market volatilities on LARGAN Precision and Hiwin Technologies 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 LARGAN Precision with a short position of Hiwin Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of LARGAN Precision and Hiwin Technologies.
Diversification Opportunities for LARGAN Precision and Hiwin Technologies
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between LARGAN and Hiwin is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding LARGAN Precision Co and Hiwin Technologies Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hiwin Technologies Corp and LARGAN Precision 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 LARGAN Precision Co are associated (or correlated) with Hiwin Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hiwin Technologies Corp has no effect on the direction of LARGAN Precision i.e., LARGAN Precision and Hiwin Technologies go up and down completely randomly.
Pair Corralation between LARGAN Precision and Hiwin Technologies
Assuming the 90 days trading horizon LARGAN Precision Co is expected to generate 1.0 times more return on investment than Hiwin Technologies. However, LARGAN Precision Co is 1.0 times less risky than Hiwin Technologies. It trades about 0.02 of its potential returns per unit of risk. Hiwin Technologies Corp is currently generating about 0.02 per unit of risk. If you would invest 222,077 in LARGAN Precision Co on August 28, 2024 and sell it today you would earn a total of 22,923 from holding LARGAN Precision Co or generate 10.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.71% |
| Values | Daily Returns |
LARGAN Precision Co vs. Hiwin Technologies Corp
Performance |
| Timeline |
| LARGAN Precision |
| Hiwin Technologies Corp |
LARGAN Precision and Hiwin Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LARGAN Precision and Hiwin Technologies
The main advantage of trading using opposite LARGAN Precision and Hiwin Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LARGAN Precision position performs unexpectedly, Hiwin Technologies 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 Hiwin Technologies will offset losses from the drop in Hiwin Technologies' long position.| LARGAN Precision vs. MediaTek | LARGAN Precision vs. Hon Hai Precision | LARGAN Precision vs. Delta Electronics | LARGAN Precision vs. Catcher Technology Co |
| Hiwin Technologies vs. Airtac International Group | Hiwin Technologies vs. Delta Electronics | Hiwin Technologies vs. LARGAN Precision Co | Hiwin Technologies vs. Advantech 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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