Correlation Between Lemtech Holdings and China Television
Can any of the company-specific risk be diversified away by investing in both Lemtech Holdings and China Television 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 China Television 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 China Television Co, you can compare the effects of market volatilities on Lemtech Holdings and China Television 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 China Television. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lemtech Holdings and China Television.
Diversification Opportunities for Lemtech Holdings and China Television
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lemtech and China is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Lemtech Holdings Co and China Television Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Television 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 China Television. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Television has no effect on the direction of Lemtech Holdings i.e., Lemtech Holdings and China Television go up and down completely randomly.
Pair Corralation between Lemtech Holdings and China Television
Assuming the 90 days trading horizon Lemtech Holdings Co is expected to generate 4.24 times more return on investment than China Television. However, Lemtech Holdings is 4.24 times more volatile than China Television Co. It trades about -0.07 of its potential returns per unit of risk. China Television Co is currently generating about -0.36 per unit of risk. If you would invest 15,700 in Lemtech Holdings Co on October 29, 2024 and sell it today you would lose (1,300) from holding Lemtech Holdings Co or give up 8.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lemtech Holdings Co vs. China Television Co
Performance |
| Timeline |
| Lemtech Holdings |
| China Television |
Lemtech Holdings and China Television Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lemtech Holdings and China Television
The main advantage of trading using opposite Lemtech Holdings and China Television positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lemtech Holdings position performs unexpectedly, China Television 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 China Television will offset losses from the drop in China Television's long position.| Lemtech Holdings vs. Primax Electronics | Lemtech Holdings vs. Nishoku Technology | Lemtech Holdings vs. Shin Zu Shing | Lemtech Holdings vs. Generalplus Technology |
| China Television vs. Choice Development | China Television vs. Ton Yi Industrial | China Television vs. Taiwan Sakura Corp | China Television vs. Thye Ming Industrial |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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