Correlation Between LARGAN Precision and Global PMX
Can any of the company-specific risk be diversified away by investing in both LARGAN Precision and Global PMX 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 Global PMX 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 Global PMX Co, you can compare the effects of market volatilities on LARGAN Precision and Global PMX 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 Global PMX. Check out your portfolio center. Please also check ongoing floating volatility patterns of LARGAN Precision and Global PMX.
Diversification Opportunities for LARGAN Precision and Global PMX
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between LARGAN and Global is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding LARGAN Precision Co and Global PMX Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global PMX 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 Global PMX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global PMX has no effect on the direction of LARGAN Precision i.e., LARGAN Precision and Global PMX go up and down completely randomly.
Pair Corralation between LARGAN Precision and Global PMX
Assuming the 90 days trading horizon LARGAN Precision is expected to generate 12.21 times less return on investment than Global PMX. But when comparing it to its historical volatility, LARGAN Precision Co is 1.2 times less risky than Global PMX. It trades about 0.0 of its potential returns per unit of risk. Global PMX Co is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 11,250 in Global PMX Co on September 1, 2024 and sell it today you would earn a total of 250.00 from holding Global PMX Co or generate 2.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.47% |
| Values | Daily Returns |
LARGAN Precision Co vs. Global PMX Co
Performance |
| Timeline |
| LARGAN Precision |
| Global PMX |
LARGAN Precision and Global PMX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LARGAN Precision and Global PMX
The main advantage of trading using opposite LARGAN Precision and Global PMX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LARGAN Precision position performs unexpectedly, Global PMX 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 Global PMX will offset losses from the drop in Global PMX's long position.| LARGAN Precision vs. MediaTek | LARGAN Precision vs. Hon Hai Precision | LARGAN Precision vs. Delta Electronics | LARGAN Precision vs. Catcher Technology Co |
| Global PMX vs. Hota Industrial Mfg | Global PMX vs. BizLink Holding | Global PMX vs. Cub Elecparts | Global PMX vs. Hu Lane Associate |
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 CEOs Directory module to screen CEOs from public companies around the world.
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