Correlation Between Lotes and Coxon Precise
Can any of the company-specific risk be diversified away by investing in both Lotes and Coxon Precise 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 Coxon Precise into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lotes Co and Coxon Precise Industrial, you can compare the effects of market volatilities on Lotes and Coxon Precise 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 Coxon Precise. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotes and Coxon Precise.
Diversification Opportunities for Lotes and Coxon Precise
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lotes and Coxon is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Lotes Co and Coxon Precise Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coxon Precise Industrial 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 Coxon Precise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coxon Precise Industrial has no effect on the direction of Lotes i.e., Lotes and Coxon Precise go up and down completely randomly.
Pair Corralation between Lotes and Coxon Precise
Assuming the 90 days trading horizon Lotes Co is expected to generate 1.24 times more return on investment than Coxon Precise. However, Lotes is 1.24 times more volatile than Coxon Precise Industrial. It trades about 0.03 of its potential returns per unit of risk. Coxon Precise Industrial is currently generating about -0.22 per unit of risk. If you would invest 186,000 in Lotes Co on October 25, 2024 and sell it today you would earn a total of 2,000 from holding Lotes Co or generate 1.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lotes Co vs. Coxon Precise Industrial
Performance |
| Timeline |
| Lotes |
| Coxon Precise Industrial |
Lotes and Coxon Precise Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotes and Coxon Precise
The main advantage of trading using opposite Lotes and Coxon Precise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotes position performs unexpectedly, Coxon Precise 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 Coxon Precise will offset losses from the drop in Coxon Precise's long position.| Lotes vs. Unimicron Technology Corp | Lotes vs. Alchip Technologies | Lotes vs. Nan Ya Printed | Lotes vs. Global Unichip Corp |
| Coxon Precise vs. Lotes Co | Coxon Precise vs. Shin Zu Shing | Coxon Precise vs. TPK Holding Co | Coxon Precise vs. Radiant Opto Electronics Corp |
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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