Correlation Between Data International and Ligitek Electronics
Can any of the company-specific risk be diversified away by investing in both Data International 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 Data International and Ligitek Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Data International Co and Ligitek Electronics Co, you can compare the effects of market volatilities on Data International 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 Data International with a short position of Ligitek Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Data International and Ligitek Electronics.
Diversification Opportunities for Data International and Ligitek Electronics
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Data and Ligitek is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Data International Co and Ligitek Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ligitek Electronics and Data International 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 Data International Co 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 Data International i.e., Data International and Ligitek Electronics go up and down completely randomly.
Pair Corralation between Data International and Ligitek Electronics
Assuming the 90 days trading horizon Data International is expected to generate 1.12 times less return on investment than Ligitek Electronics. In addition to that, Data International is 1.32 times more volatile than Ligitek Electronics Co. It trades about 0.07 of its total potential returns per unit of risk. Ligitek Electronics Co is currently generating about 0.11 per unit of volatility. If you would invest 1,925 in Ligitek Electronics Co on September 2, 2024 and sell it today you would earn a total of 2,020 from holding Ligitek Electronics Co or generate 104.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Data International Co vs. Ligitek Electronics Co
Performance |
| Timeline |
| Data International |
| Ligitek Electronics |
Data International and Ligitek Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Data International and Ligitek Electronics
The main advantage of trading using opposite Data International and Ligitek Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Data International 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.| Data International vs. Hon Hai Precision | Data International vs. Delta Electronics | Data International vs. LARGAN Precision Co | Data International vs. Yageo Corp |
| Ligitek Electronics vs. U Media Communications | Ligitek Electronics vs. ESUN Financial Holding | Ligitek Electronics vs. Data International Co | Ligitek Electronics vs. Otsuka Information 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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