Correlation Between Altek Corp and Leader Electronics
Can any of the company-specific risk be diversified away by investing in both Altek Corp and Leader Electronics 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 Altek Corp and Leader Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altek Corp and Leader Electronics, you can compare the effects of market volatilities on Altek Corp and Leader Electronics 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 Altek Corp with a short position of Leader Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altek Corp and Leader Electronics.
Diversification Opportunities for Altek Corp and Leader Electronics
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Altek and Leader is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Altek Corp and Leader Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leader Electronics and Altek Corp 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 Altek Corp are associated (or correlated) with Leader Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leader Electronics has no effect on the direction of Altek Corp i.e., Altek Corp and Leader Electronics go up and down completely randomly.
Pair Corralation between Altek Corp and Leader Electronics
Assuming the 90 days trading horizon Altek Corp is expected to under-perform the Leader Electronics. But the stock apears to be less risky and, when comparing its historical volatility, Altek Corp is 1.14 times less risky than Leader Electronics. The stock trades about -0.26 of its potential returns per unit of risk. The Leader Electronics is currently generating about -0.17 of returns per unit of risk over similar time horizon. If you would invest 1,760 in Leader Electronics on September 12, 2024 and sell it today you would lose (110.00) from holding Leader Electronics or give up 6.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Altek Corp vs. Leader Electronics
Performance |
| Timeline |
| Altek Corp |
| Leader Electronics |
Altek Corp and Leader Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Altek Corp and Leader Electronics
The main advantage of trading using opposite Altek Corp and Leader Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altek Corp position performs unexpectedly, Leader Electronics 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 Leader Electronics will offset losses from the drop in Leader Electronics' long position.| Altek Corp vs. Ability Enterprise Co | Altek Corp vs. Sunplus Technology Co | Altek Corp vs. ALi Corp | Altek Corp vs. Edom Technology Co |
| 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 |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |