Correlation Between Shin Zu and Lemtech Holdings
Can any of the company-specific risk be diversified away by investing in both Shin Zu and Lemtech Holdings 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 Shin Zu and Lemtech Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shin Zu Shing and Lemtech Holdings Co, you can compare the effects of market volatilities on Shin Zu and Lemtech Holdings 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 Shin Zu with a short position of Lemtech Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shin Zu and Lemtech Holdings.
Diversification Opportunities for Shin Zu and Lemtech Holdings
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shin and Lemtech is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Shin Zu Shing and Lemtech Holdings Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lemtech Holdings and Shin Zu 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 Shin Zu Shing are associated (or correlated) with Lemtech Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lemtech Holdings has no effect on the direction of Shin Zu i.e., Shin Zu and Lemtech Holdings go up and down completely randomly.
Pair Corralation between Shin Zu and Lemtech Holdings
Assuming the 90 days trading horizon Shin Zu Shing is expected to generate 1.27 times more return on investment than Lemtech Holdings. However, Shin Zu is 1.27 times more volatile than Lemtech Holdings Co. It trades about 0.09 of its potential returns per unit of risk. Lemtech Holdings Co is currently generating about 0.08 per unit of risk. If you would invest 9,250 in Shin Zu Shing on October 25, 2024 and sell it today you would earn a total of 12,150 from holding Shin Zu Shing or generate 131.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shin Zu Shing vs. Lemtech Holdings Co
Performance |
| Timeline |
| Shin Zu Shing |
| Lemtech Holdings |
Shin Zu and Lemtech Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shin Zu and Lemtech Holdings
The main advantage of trading using opposite Shin Zu and Lemtech Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shin Zu position performs unexpectedly, Lemtech Holdings 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 Lemtech Holdings will offset losses from the drop in Lemtech Holdings' long position.| Shin Zu vs. Catcher Technology Co | Shin Zu vs. Tripod Technology Corp | Shin Zu vs. Chicony Electronics Co | Shin Zu vs. Kinsus Interconnect Technology |
| Lemtech Holdings vs. Primax Electronics | Lemtech Holdings vs. Nishoku Technology | Lemtech Holdings vs. Shin Zu Shing | Lemtech Holdings vs. Generalplus Technology |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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