Correlation Between Leader Electronics and SynCore Biotechnology
Can any of the company-specific risk be diversified away by investing in both Leader Electronics and SynCore 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 SynCore 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 SynCore Biotechnology Co, you can compare the effects of market volatilities on Leader Electronics and SynCore 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 SynCore Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leader Electronics and SynCore Biotechnology.
Diversification Opportunities for Leader Electronics and SynCore Biotechnology
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Leader and SynCore is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Leader Electronics and SynCore Biotechnology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SynCore Biotechnology 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 SynCore Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SynCore Biotechnology has no effect on the direction of Leader Electronics i.e., Leader Electronics and SynCore Biotechnology go up and down completely randomly.
Pair Corralation between Leader Electronics and SynCore Biotechnology
Assuming the 90 days trading horizon Leader Electronics is expected to generate 1.18 times more return on investment than SynCore Biotechnology. However, Leader Electronics is 1.18 times more volatile than SynCore Biotechnology Co. It trades about -0.11 of its potential returns per unit of risk. SynCore Biotechnology Co is currently generating about -0.22 per unit of risk. If you would invest 1,760 in Leader Electronics on September 5, 2024 and sell it today you would lose (85.00) from holding Leader Electronics or give up 4.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Leader Electronics vs. SynCore Biotechnology Co
Performance |
| Timeline |
| Leader Electronics |
| SynCore Biotechnology |
Leader Electronics and SynCore Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leader Electronics and SynCore Biotechnology
The main advantage of trading using opposite Leader Electronics and SynCore Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leader Electronics position performs unexpectedly, SynCore 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 SynCore Biotechnology will offset losses from the drop in SynCore Biotechnology's long position.| Leader Electronics vs. Universal Microelectronics Co | Leader Electronics vs. AVerMedia Technologies | Leader Electronics vs. Symtek Automation Asia | Leader Electronics vs. WiseChip Semiconductor |
| SynCore Biotechnology vs. Symtek Automation Asia | SynCore Biotechnology vs. WiseChip Semiconductor | SynCore Biotechnology vs. Novatek Microelectronics Corp | SynCore 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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