Correlation Between Jentech Precision and Lotes
Can any of the company-specific risk be diversified away by investing in both Jentech Precision and Lotes 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 Jentech Precision and Lotes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jentech Precision Industrial and Lotes Co, you can compare the effects of market volatilities on Jentech Precision and Lotes 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 Jentech Precision with a short position of Lotes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jentech Precision and Lotes.
Diversification Opportunities for Jentech Precision and Lotes
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Jentech and Lotes is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Jentech Precision Industrial and Lotes Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotes and Jentech Precision 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 Jentech Precision Industrial are associated (or correlated) with Lotes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotes has no effect on the direction of Jentech Precision i.e., Jentech Precision and Lotes go up and down completely randomly.
Pair Corralation between Jentech Precision and Lotes
Assuming the 90 days trading horizon Jentech Precision Industrial is expected to generate 1.49 times more return on investment than Lotes. However, Jentech Precision is 1.49 times more volatile than Lotes Co. It trades about 0.05 of its potential returns per unit of risk. Lotes Co is currently generating about -0.02 per unit of risk. If you would invest 146,500 in Jentech Precision Industrial on August 28, 2024 and sell it today you would earn a total of 3,500 from holding Jentech Precision Industrial or generate 2.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jentech Precision Industrial vs. Lotes Co
Performance |
| Timeline |
| Jentech Precision |
| Lotes |
Jentech Precision and Lotes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jentech Precision and Lotes
The main advantage of trading using opposite Jentech Precision and Lotes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jentech Precision position performs unexpectedly, Lotes 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 Lotes will offset losses from the drop in Lotes' long position.| Jentech Precision vs. Lotes Co | Jentech Precision vs. Nan Ya Printed | Jentech Precision vs. Global Unichip Corp | Jentech Precision vs. Tong Hsing Electronic |
| Lotes vs. Unimicron Technology Corp | Lotes vs. Alchip Technologies | Lotes vs. Nan Ya Printed | Lotes vs. Global Unichip 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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