Correlation Between Lemtech Holdings and Yeong Guan
Can any of the company-specific risk be diversified away by investing in both Lemtech Holdings and Yeong Guan 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 Lemtech Holdings and Yeong Guan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lemtech Holdings Co and Yeong Guan Energy, you can compare the effects of market volatilities on Lemtech Holdings and Yeong Guan 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 Lemtech Holdings with a short position of Yeong Guan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lemtech Holdings and Yeong Guan.
Diversification Opportunities for Lemtech Holdings and Yeong Guan
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lemtech and Yeong is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Lemtech Holdings Co and Yeong Guan Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yeong Guan Energy and Lemtech Holdings 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 Lemtech Holdings Co are associated (or correlated) with Yeong Guan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yeong Guan Energy has no effect on the direction of Lemtech Holdings i.e., Lemtech Holdings and Yeong Guan go up and down completely randomly.
Pair Corralation between Lemtech Holdings and Yeong Guan
Assuming the 90 days trading horizon Lemtech Holdings Co is expected to generate 0.81 times more return on investment than Yeong Guan. However, Lemtech Holdings Co is 1.23 times less risky than Yeong Guan. It trades about 0.06 of its potential returns per unit of risk. Yeong Guan Energy is currently generating about -0.04 per unit of risk. If you would invest 10,500 in Lemtech Holdings Co on August 24, 2024 and sell it today you would earn a total of 200.00 from holding Lemtech Holdings Co or generate 1.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lemtech Holdings Co vs. Yeong Guan Energy
Performance |
| Timeline |
| Lemtech Holdings |
| Yeong Guan Energy |
Lemtech Holdings and Yeong Guan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lemtech Holdings and Yeong Guan
The main advantage of trading using opposite Lemtech Holdings and Yeong Guan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lemtech Holdings position performs unexpectedly, Yeong Guan 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 Yeong Guan will offset losses from the drop in Yeong Guan's long position.| Lemtech Holdings vs. Primax Electronics | Lemtech Holdings vs. Nishoku Technology | Lemtech Holdings vs. Shin Zu Shing | Lemtech Holdings vs. Generalplus Technology |
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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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