Correlation Between Nishoku Technology and Lemtech Holdings
Can any of the company-specific risk be diversified away by investing in both Nishoku Technology and Lemtech Holdings 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 Nishoku Technology and Lemtech Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nishoku Technology and Lemtech Holdings Co, you can compare the effects of market volatilities on Nishoku Technology and Lemtech Holdings 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 Nishoku Technology with a short position of Lemtech Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nishoku Technology and Lemtech Holdings.
Diversification Opportunities for Nishoku Technology and Lemtech Holdings
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nishoku and Lemtech is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Nishoku Technology and Lemtech Holdings Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lemtech Holdings and Nishoku 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 Nishoku Technology are associated (or correlated) with Lemtech Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lemtech Holdings has no effect on the direction of Nishoku Technology i.e., Nishoku Technology and Lemtech Holdings go up and down completely randomly.
Pair Corralation between Nishoku Technology and Lemtech Holdings
Assuming the 90 days trading horizon Nishoku Technology is expected to generate 2.88 times less return on investment than Lemtech Holdings. But when comparing it to its historical volatility, Nishoku Technology is 4.15 times less risky than Lemtech Holdings. It trades about 0.24 of its potential returns per unit of risk. Lemtech Holdings Co is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 11,000 in Lemtech Holdings Co on October 25, 2024 and sell it today you would earn a total of 3,400 from holding Lemtech Holdings Co or generate 30.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nishoku Technology vs. Lemtech Holdings Co
Performance |
| Timeline |
| Nishoku Technology |
| Lemtech Holdings |
Nishoku Technology and Lemtech Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nishoku Technology and Lemtech Holdings
The main advantage of trading using opposite Nishoku Technology and Lemtech Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nishoku Technology position performs unexpectedly, Lemtech Holdings 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 Lemtech Holdings will offset losses from the drop in Lemtech Holdings' long position.| Nishoku Technology vs. Chang Type Industrial | Nishoku Technology vs. Anderson Industrial Corp | Nishoku Technology vs. Klingon Aerospace | Nishoku Technology vs. Basso Industry Corp |
| Lemtech Holdings vs. Primax Electronics | Lemtech Holdings vs. Nishoku Technology | Lemtech Holdings vs. Shin Zu Shing | Lemtech Holdings vs. Generalplus Technology |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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