Correlation Between Lotes and Ligitek Electronics
Can any of the company-specific risk be diversified away by investing in both Lotes and Ligitek 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 Lotes and Ligitek Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lotes Co and Ligitek Electronics Co, you can compare the effects of market volatilities on Lotes and Ligitek 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 Lotes with a short position of Ligitek Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotes and Ligitek Electronics.
Diversification Opportunities for Lotes and Ligitek Electronics
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lotes and Ligitek is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Lotes Co and Ligitek Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ligitek Electronics 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 Ligitek Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ligitek Electronics has no effect on the direction of Lotes i.e., Lotes and Ligitek Electronics go up and down completely randomly.
Pair Corralation between Lotes and Ligitek Electronics
Assuming the 90 days trading horizon Lotes Co is expected to generate 0.61 times more return on investment than Ligitek Electronics. However, Lotes Co is 1.65 times less risky than Ligitek Electronics. It trades about -0.02 of its potential returns per unit of risk. Ligitek Electronics Co is currently generating about -0.03 per unit of risk. If you would invest 167,000 in Lotes Co on August 30, 2024 and sell it today you would lose (2,000) from holding Lotes Co or give up 1.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lotes Co vs. Ligitek Electronics Co
Performance |
| Timeline |
| Lotes |
| Ligitek Electronics |
Lotes and Ligitek Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotes and Ligitek Electronics
The main advantage of trading using opposite Lotes and Ligitek Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotes position performs unexpectedly, Ligitek 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 Ligitek Electronics will offset losses from the drop in Ligitek Electronics' long position.| Lotes vs. Unimicron Technology Corp | Lotes vs. Alchip Technologies | Lotes vs. Nan Ya Printed | Lotes vs. Global Unichip Corp |
| Ligitek Electronics vs. Hon Hai Precision | Ligitek Electronics vs. Delta Electronics | Ligitek Electronics vs. LARGAN Precision Co | Ligitek Electronics vs. E Ink Holdings |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |