Correlation Between Leader Electronics and Apex Biotechnology
Can any of the company-specific risk be diversified away by investing in both Leader Electronics and Apex Biotechnology 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 Leader Electronics and Apex Biotechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leader Electronics and Apex Biotechnology Corp, you can compare the effects of market volatilities on Leader Electronics and Apex Biotechnology 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 Leader Electronics with a short position of Apex Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leader Electronics and Apex Biotechnology.
Diversification Opportunities for Leader Electronics and Apex Biotechnology
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Leader and Apex is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Leader Electronics and Apex Biotechnology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apex Biotechnology Corp and Leader Electronics 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 Leader Electronics are associated (or correlated) with Apex Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apex Biotechnology Corp has no effect on the direction of Leader Electronics i.e., Leader Electronics and Apex Biotechnology go up and down completely randomly.
Pair Corralation between Leader Electronics and Apex Biotechnology
Assuming the 90 days trading horizon Leader Electronics is expected to under-perform the Apex Biotechnology. In addition to that, Leader Electronics is 2.06 times more volatile than Apex Biotechnology Corp. It trades about -0.1 of its total potential returns per unit of risk. Apex Biotechnology Corp is currently generating about -0.1 per unit of volatility. If you would invest 2,950 in Apex Biotechnology Corp on September 12, 2024 and sell it today you would lose (155.00) from holding Apex Biotechnology Corp or give up 5.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Leader Electronics vs. Apex Biotechnology Corp
Performance |
| Timeline |
| Leader Electronics |
| Apex Biotechnology Corp |
Leader Electronics and Apex Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leader Electronics and Apex Biotechnology
The main advantage of trading using opposite Leader Electronics and Apex Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leader Electronics position performs unexpectedly, Apex Biotechnology 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 Apex Biotechnology will offset losses from the drop in Apex Biotechnology's long position.| Leader Electronics vs. Yang Ming Marine | Leader Electronics vs. Wan Hai Lines | Leader Electronics vs. U Ming Marine Transport | Leader Electronics vs. Taiwan Navigation Co |
| Apex Biotechnology vs. Ruentex Development Co | Apex Biotechnology vs. WiseChip Semiconductor | Apex Biotechnology vs. Novatek Microelectronics Corp | Apex Biotechnology vs. Leader 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |