Correlation Between Leader Electronics and Altek Corp
Can any of the company-specific risk be diversified away by investing in both Leader Electronics and Altek Corp 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 Altek Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leader Electronics and Altek Corp, you can compare the effects of market volatilities on Leader Electronics and Altek Corp 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 Altek Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leader Electronics and Altek Corp.
Diversification Opportunities for Leader Electronics and Altek Corp
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Leader and Altek is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Leader Electronics and Altek Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altek 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 Altek Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altek Corp has no effect on the direction of Leader Electronics i.e., Leader Electronics and Altek Corp go up and down completely randomly.
Pair Corralation between Leader Electronics and Altek Corp
Assuming the 90 days trading horizon Leader Electronics is expected to generate 1.33 times more return on investment than Altek Corp. However, Leader Electronics is 1.33 times more volatile than Altek Corp. It trades about -0.11 of its potential returns per unit of risk. Altek Corp is currently generating about -0.2 per unit of risk. If you would invest 1,760 in Leader Electronics on September 4, 2024 and sell it today you would lose (80.00) from holding Leader Electronics or give up 4.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Leader Electronics vs. Altek Corp
Performance |
| Timeline |
| Leader Electronics |
| Altek Corp |
Leader Electronics and Altek Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leader Electronics and Altek Corp
The main advantage of trading using opposite Leader Electronics and Altek Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leader Electronics position performs unexpectedly, Altek Corp 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 Altek Corp will offset losses from the drop in Altek Corp's long position.| Leader Electronics vs. Altek Corp | Leader Electronics vs. Promise Technology | Leader Electronics vs. Edom Technology Co | Leader Electronics vs. Spirox Corp |
| Altek Corp vs. Tainan Spinning Co | Altek Corp vs. Chia Her Industrial | Altek Corp vs. WiseChip Semiconductor | Altek Corp vs. Novatek Microelectronics Corp |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |