Correlation Between LARGAN Precision and Kingstate Electronics
Can any of the company-specific risk be diversified away by investing in both LARGAN Precision and Kingstate Electronics 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 Kingstate Electronics 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 Kingstate Electronics, you can compare the effects of market volatilities on LARGAN Precision and Kingstate Electronics 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 Kingstate Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of LARGAN Precision and Kingstate Electronics.
Diversification Opportunities for LARGAN Precision and Kingstate Electronics
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between LARGAN and Kingstate is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding LARGAN Precision Co and Kingstate Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kingstate Electronics 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 Kingstate Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kingstate Electronics has no effect on the direction of LARGAN Precision i.e., LARGAN Precision and Kingstate Electronics go up and down completely randomly.
Pair Corralation between LARGAN Precision and Kingstate Electronics
Assuming the 90 days trading horizon LARGAN Precision Co is expected to generate 1.09 times more return on investment than Kingstate Electronics. However, LARGAN Precision is 1.09 times more volatile than Kingstate Electronics. It trades about -0.03 of its potential returns per unit of risk. Kingstate Electronics is currently generating about -0.3 per unit of risk. If you would invest 240,500 in LARGAN Precision Co on August 24, 2024 and sell it today you would lose (4,000) from holding LARGAN Precision Co or give up 1.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LARGAN Precision Co vs. Kingstate Electronics
Performance |
| Timeline |
| LARGAN Precision |
| Kingstate Electronics |
LARGAN Precision and Kingstate Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LARGAN Precision and Kingstate Electronics
The main advantage of trading using opposite LARGAN Precision and Kingstate Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LARGAN Precision position performs unexpectedly, Kingstate Electronics 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 Kingstate Electronics will offset losses from the drop in Kingstate Electronics' long position.| LARGAN Precision vs. Novatek Microelectronics Corp | LARGAN Precision vs. MediaTek | LARGAN Precision vs. Quanta Computer | LARGAN Precision vs. United Microelectronics |
| Kingstate Electronics vs. Formosan Union Chemical | Kingstate Electronics vs. Acelon Chemicals Fiber | Kingstate Electronics vs. San Fu Chemical | Kingstate Electronics vs. Ambassador Hotel |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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