Correlation Between LARGAN Precision and Etron Technology
Can any of the company-specific risk be diversified away by investing in both LARGAN Precision and Etron 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 LARGAN Precision and Etron Technology 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 Etron Technology, you can compare the effects of market volatilities on LARGAN Precision and Etron 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 LARGAN Precision with a short position of Etron Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of LARGAN Precision and Etron Technology.
Diversification Opportunities for LARGAN Precision and Etron Technology
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between LARGAN and Etron is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding LARGAN Precision Co and Etron Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Etron Technology 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 Etron Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Etron Technology has no effect on the direction of LARGAN Precision i.e., LARGAN Precision and Etron Technology go up and down completely randomly.
Pair Corralation between LARGAN Precision and Etron Technology
Assuming the 90 days trading horizon LARGAN Precision Co is expected to generate 1.0 times more return on investment than Etron Technology. However, LARGAN Precision Co is 1.0 times less risky than Etron Technology. It trades about 0.15 of its potential returns per unit of risk. Etron Technology is currently generating about -0.19 per unit of risk. If you would invest 255,000 in LARGAN Precision Co on October 20, 2024 and sell it today you would earn a total of 18,000 from holding LARGAN Precision Co or generate 7.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LARGAN Precision Co vs. Etron Technology
Performance |
| Timeline |
| LARGAN Precision |
| Etron Technology |
LARGAN Precision and Etron Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LARGAN Precision and Etron Technology
The main advantage of trading using opposite LARGAN Precision and Etron Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LARGAN Precision position performs unexpectedly, Etron 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 Etron Technology will offset losses from the drop in Etron Technology's long position.| LARGAN Precision vs. MediaTek | LARGAN Precision vs. Hon Hai Precision | LARGAN Precision vs. Delta Electronics | LARGAN Precision vs. Catcher Technology Co |
| Etron Technology vs. Sunplus Technology Co | Etron Technology vs. Realtek Semiconductor Corp | Etron Technology vs. Winbond Electronics Corp | Etron Technology vs. VIA Technologies |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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