Correlation Between Connection Technology and Ligitek Electronics
Can any of the company-specific risk be diversified away by investing in both Connection Technology 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 Connection Technology and Ligitek 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 Ligitek Electronics Co, you can compare the effects of market volatilities on Connection Technology 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 Connection Technology with a short position of Ligitek Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Connection Technology and Ligitek Electronics.
Diversification Opportunities for Connection Technology and Ligitek Electronics
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Connection and Ligitek is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Connection Technology Systems and Ligitek Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ligitek Electronics 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 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 Connection Technology i.e., Connection Technology and Ligitek Electronics go up and down completely randomly.
Pair Corralation between Connection Technology and Ligitek Electronics
Assuming the 90 days trading horizon Connection Technology Systems is expected to under-perform the Ligitek Electronics. In addition to that, Connection Technology is 1.0 times more volatile than Ligitek Electronics Co. It trades about -0.01 of its total potential returns per unit of risk. Ligitek Electronics Co is currently generating about 0.1 per unit of volatility. If you would invest 1,547 in Ligitek Electronics Co on October 30, 2024 and sell it today you would earn a total of 3,653 from holding Ligitek Electronics Co or generate 236.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Connection Technology Systems vs. Ligitek Electronics Co
Performance |
| Timeline |
| Connection Technology |
| Ligitek Electronics |
Connection Technology and Ligitek Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Connection Technology and Ligitek Electronics
The main advantage of trading using opposite Connection Technology and Ligitek Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Connection Technology 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.| Connection Technology vs. Golden Biotechnology | Connection Technology vs. Shinkong Insurance Co | Connection Technology vs. Apex Biotechnology Corp | Connection Technology vs. Sunmax Biotechnology Co |
| Ligitek Electronics vs. Advantech Co | Ligitek Electronics vs. IEI Integration Corp | Ligitek Electronics vs. Flytech Technology Co | Ligitek Electronics vs. Ennoconn 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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