Correlation Between Leader Electronics and Min Aik
Can any of the company-specific risk be diversified away by investing in both Leader Electronics and Min Aik 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 Min Aik into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leader Electronics and Min Aik Technology, you can compare the effects of market volatilities on Leader Electronics and Min Aik 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 Min Aik. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leader Electronics and Min Aik.
Diversification Opportunities for Leader Electronics and Min Aik
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Leader and Min is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Leader Electronics and Min Aik Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Min Aik Technology 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 Min Aik. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Min Aik Technology has no effect on the direction of Leader Electronics i.e., Leader Electronics and Min Aik go up and down completely randomly.
Pair Corralation between Leader Electronics and Min Aik
Assuming the 90 days trading horizon Leader Electronics is expected to generate 0.71 times more return on investment than Min Aik. However, Leader Electronics is 1.42 times less risky than Min Aik. It trades about -0.24 of its potential returns per unit of risk. Min Aik Technology is currently generating about -0.29 per unit of risk. If you would invest 1,800 in Leader Electronics on September 2, 2024 and sell it today you would lose (170.00) from holding Leader Electronics or give up 9.44% 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. Min Aik Technology
Performance |
| Timeline |
| Leader Electronics |
| Min Aik Technology |
Leader Electronics and Min Aik Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leader Electronics and Min Aik
The main advantage of trading using opposite Leader Electronics and Min Aik positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leader Electronics position performs unexpectedly, Min Aik 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 Min Aik will offset losses from the drop in Min Aik's long position.| Leader Electronics vs. BES Engineering Co | Leader Electronics vs. Continental Holdings Corp | Leader Electronics vs. Kee Tai Properties | Leader Electronics vs. Hung Sheng Construction |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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