Correlation Between Aces Electronics and Logah Technology
Can any of the company-specific risk be diversified away by investing in both Aces Electronics and Logah Technology 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 Aces Electronics and Logah Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aces Electronics Co and Logah Technology Corp, you can compare the effects of market volatilities on Aces Electronics and Logah Technology 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 Aces Electronics with a short position of Logah Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aces Electronics and Logah Technology.
Diversification Opportunities for Aces Electronics and Logah Technology
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aces and Logah is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Aces Electronics Co and Logah Technology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Logah Technology Corp and Aces Electronics 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 Aces Electronics Co are associated (or correlated) with Logah Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Logah Technology Corp has no effect on the direction of Aces Electronics i.e., Aces Electronics and Logah Technology go up and down completely randomly.
Pair Corralation between Aces Electronics and Logah Technology
Assuming the 90 days trading horizon Aces Electronics Co is expected to under-perform the Logah Technology. But the stock apears to be less risky and, when comparing its historical volatility, Aces Electronics Co is 1.89 times less risky than Logah Technology. The stock trades about -0.28 of its potential returns per unit of risk. The Logah Technology Corp is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 804.00 in Logah Technology Corp on October 11, 2024 and sell it today you would lose (44.00) from holding Logah Technology Corp or give up 5.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aces Electronics Co vs. Logah Technology Corp
Performance |
| Timeline |
| Aces Electronics |
| Logah Technology Corp |
Aces Electronics and Logah Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aces Electronics and Logah Technology
The main advantage of trading using opposite Aces Electronics and Logah Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aces Electronics position performs unexpectedly, Logah Technology 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 Logah Technology will offset losses from the drop in Logah Technology's long position.| Aces Electronics vs. Chant Sincere Co | Aces Electronics vs. Altek Corp | Aces Electronics vs. Jentech Precision Industrial | Aces Electronics vs. Lotes Co |
| Logah Technology vs. Aces Electronics Co | Logah Technology vs. Nichidenbo Corp | Logah Technology vs. Cheer Time Enterprise | Logah Technology vs. Edison Opto 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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