Correlation Between LARGAN Precision and Visual Photonics
Can any of the company-specific risk be diversified away by investing in both LARGAN Precision and Visual Photonics 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 Visual Photonics 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 Visual Photonics Epitaxy, you can compare the effects of market volatilities on LARGAN Precision and Visual Photonics 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 Visual Photonics. Check out your portfolio center. Please also check ongoing floating volatility patterns of LARGAN Precision and Visual Photonics.
Diversification Opportunities for LARGAN Precision and Visual Photonics
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between LARGAN and Visual is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding LARGAN Precision Co and Visual Photonics Epitaxy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Visual Photonics Epitaxy 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 Visual Photonics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Visual Photonics Epitaxy has no effect on the direction of LARGAN Precision i.e., LARGAN Precision and Visual Photonics go up and down completely randomly.
Pair Corralation between LARGAN Precision and Visual Photonics
Assuming the 90 days trading horizon LARGAN Precision Co is expected to generate 0.62 times more return on investment than Visual Photonics. However, LARGAN Precision Co is 1.62 times less risky than Visual Photonics. It trades about 0.13 of its potential returns per unit of risk. Visual Photonics Epitaxy is currently generating about 0.08 per unit of risk. If you would invest 237,000 in LARGAN Precision Co on October 25, 2024 and sell it today you would earn a total of 38,000 from holding LARGAN Precision Co or generate 16.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LARGAN Precision Co vs. Visual Photonics Epitaxy
Performance |
| Timeline |
| LARGAN Precision |
| Visual Photonics Epitaxy |
LARGAN Precision and Visual Photonics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LARGAN Precision and Visual Photonics
The main advantage of trading using opposite LARGAN Precision and Visual Photonics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LARGAN Precision position performs unexpectedly, Visual Photonics 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 Visual Photonics will offset losses from the drop in Visual Photonics' long position.| LARGAN Precision vs. MediaTek | LARGAN Precision vs. Hon Hai Precision | LARGAN Precision vs. Delta Electronics | LARGAN Precision vs. Catcher Technology Co |
| Visual Photonics vs. WIN Semiconductors | Visual Photonics vs. Advanced Wireless Semiconductor | Visual Photonics vs. Elan Microelectronics Corp | Visual Photonics vs. King Yuan Electronics |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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