Correlation Between LARGAN Precision and Aker Technology
Can any of the company-specific risk be diversified away by investing in both LARGAN Precision and Aker 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 Aker 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 Aker Technology Co, you can compare the effects of market volatilities on LARGAN Precision and Aker 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 Aker Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of LARGAN Precision and Aker Technology.
Diversification Opportunities for LARGAN Precision and Aker Technology
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between LARGAN and Aker is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding LARGAN Precision Co and Aker Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aker 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 Aker Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aker Technology has no effect on the direction of LARGAN Precision i.e., LARGAN Precision and Aker Technology go up and down completely randomly.
Pair Corralation between LARGAN Precision and Aker Technology
Assuming the 90 days trading horizon LARGAN Precision is expected to generate 6.41 times less return on investment than Aker Technology. But when comparing it to its historical volatility, LARGAN Precision Co is 2.19 times less risky than Aker Technology. It trades about 0.1 of its potential returns per unit of risk. Aker Technology Co is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 2,110 in Aker Technology Co on September 3, 2024 and sell it today you would earn a total of 630.00 from holding Aker Technology Co or generate 29.86% 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. Aker Technology Co
Performance |
| Timeline |
| LARGAN Precision |
| Aker Technology |
LARGAN Precision and Aker Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LARGAN Precision and Aker Technology
The main advantage of trading using opposite LARGAN Precision and Aker Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LARGAN Precision position performs unexpectedly, Aker 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 Aker Technology will offset losses from the drop in Aker 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 |
| Aker Technology vs. Tang Eng Iron | Aker Technology vs. Yeou Yih Steel | Aker Technology vs. Arima Communications Corp | Aker Technology vs. Quintain Steel 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |