Correlation Between Connection Technology and Lelon Electronics
Can any of the company-specific risk be diversified away by investing in both Connection Technology and Lelon 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 Connection Technology and Lelon Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Connection Technology Systems and Lelon Electronics Corp, you can compare the effects of market volatilities on Connection Technology and Lelon 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 Connection Technology with a short position of Lelon Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Connection Technology and Lelon Electronics.
Diversification Opportunities for Connection Technology and Lelon Electronics
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Connection and Lelon is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Connection Technology Systems and Lelon Electronics Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lelon Electronics Corp and Connection Technology 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 Connection Technology Systems are associated (or correlated) with Lelon Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lelon Electronics Corp has no effect on the direction of Connection Technology i.e., Connection Technology and Lelon Electronics go up and down completely randomly.
Pair Corralation between Connection Technology and Lelon Electronics
Assuming the 90 days trading horizon Connection Technology Systems is expected to under-perform the Lelon Electronics. In addition to that, Connection Technology is 1.96 times more volatile than Lelon Electronics Corp. It trades about -0.2 of its total potential returns per unit of risk. Lelon Electronics Corp is currently generating about 0.36 per unit of volatility. If you would invest 7,200 in Lelon Electronics Corp on September 5, 2024 and sell it today you would earn a total of 980.00 from holding Lelon Electronics Corp or generate 13.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Connection Technology Systems vs. Lelon Electronics Corp
Performance |
| Timeline |
| Connection Technology |
| Lelon Electronics Corp |
Connection Technology and Lelon Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Connection Technology and Lelon Electronics
The main advantage of trading using opposite Connection Technology and Lelon Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Connection Technology position performs unexpectedly, Lelon 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 Lelon Electronics will offset losses from the drop in Lelon Electronics' long position.| Connection Technology vs. Lelon Electronics Corp | Connection Technology vs. Ligitek Electronics Co | Connection Technology vs. GameSparcs Co | Connection Technology vs. Cowealth Medical Holding |
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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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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