Correlation Between Lotes and Xintec
Can any of the company-specific risk be diversified away by investing in both Lotes and Xintec 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 Lotes and Xintec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lotes Co and Xintec, you can compare the effects of market volatilities on Lotes and Xintec 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 Lotes with a short position of Xintec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotes and Xintec.
Diversification Opportunities for Lotes and Xintec
Excellent diversification
The 3 months correlation between Lotes and Xintec is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Lotes Co and Xintec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xintec and Lotes 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 Lotes Co are associated (or correlated) with Xintec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xintec has no effect on the direction of Lotes i.e., Lotes and Xintec go up and down completely randomly.
Pair Corralation between Lotes and Xintec
Assuming the 90 days trading horizon Lotes Co is expected to generate 1.01 times more return on investment than Xintec. However, Lotes is 1.01 times more volatile than Xintec. It trades about 0.1 of its potential returns per unit of risk. Xintec is currently generating about 0.05 per unit of risk. If you would invest 75,766 in Lotes Co on September 12, 2024 and sell it today you would earn a total of 112,734 from holding Lotes Co or generate 148.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.42% |
| Values | Daily Returns |
Lotes Co vs. Xintec
Performance |
| Timeline |
| Lotes |
| Xintec |
Lotes and Xintec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotes and Xintec
The main advantage of trading using opposite Lotes and Xintec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotes position performs unexpectedly, Xintec 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 Xintec will offset losses from the drop in Xintec's long position.| Lotes vs. Unimicron Technology Corp | Lotes vs. Alchip Technologies | Lotes vs. Nan Ya Printed | Lotes vs. Global Unichip Corp |
| Xintec vs. Wei Chih Steel | Xintec vs. Century Iron And | Xintec vs. Lian Hwa Foods | Xintec vs. Tang Eng Iron |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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