Correlation Between Leader Electronics and Amazing Microelectronic
Can any of the company-specific risk be diversified away by investing in both Leader Electronics and Amazing Microelectronic 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 Amazing Microelectronic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leader Electronics and Amazing Microelectronic, you can compare the effects of market volatilities on Leader Electronics and Amazing Microelectronic 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 Amazing Microelectronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leader Electronics and Amazing Microelectronic.
Diversification Opportunities for Leader Electronics and Amazing Microelectronic
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Leader and Amazing is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Leader Electronics and Amazing Microelectronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amazing Microelectronic 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 Amazing Microelectronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amazing Microelectronic has no effect on the direction of Leader Electronics i.e., Leader Electronics and Amazing Microelectronic go up and down completely randomly.
Pair Corralation between Leader Electronics and Amazing Microelectronic
Assuming the 90 days trading horizon Leader Electronics is expected to under-perform the Amazing Microelectronic. In addition to that, Leader Electronics is 1.15 times more volatile than Amazing Microelectronic. It trades about -0.15 of its total potential returns per unit of risk. Amazing Microelectronic is currently generating about -0.1 per unit of volatility. If you would invest 9,800 in Amazing Microelectronic on August 30, 2024 and sell it today you would lose (350.00) from holding Amazing Microelectronic or give up 3.57% 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. Amazing Microelectronic
Performance |
| Timeline |
| Leader Electronics |
| Amazing Microelectronic |
Leader Electronics and Amazing Microelectronic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leader Electronics and Amazing Microelectronic
The main advantage of trading using opposite Leader Electronics and Amazing Microelectronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leader Electronics position performs unexpectedly, Amazing Microelectronic 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 Amazing Microelectronic will offset losses from the drop in Amazing Microelectronic's long position.| Leader Electronics vs. Yulon Motor Co | Leader Electronics vs. Far Eastern Department | Leader Electronics vs. China Steel Corp | Leader Electronics vs. Chang Hwa Commercial |
| Amazing Microelectronic vs. Univacco Technology | Amazing Microelectronic vs. Yeou Yih Steel | Amazing Microelectronic vs. Chicony Power Technology | Amazing Microelectronic 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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