Correlation Between Lihtai Construction and Syntek Semiconductor
Can any of the company-specific risk be diversified away by investing in both Lihtai Construction and Syntek Semiconductor 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 Lihtai Construction and Syntek Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lihtai Construction Enterprise and Syntek Semiconductor Co, you can compare the effects of market volatilities on Lihtai Construction and Syntek Semiconductor 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 Lihtai Construction with a short position of Syntek Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lihtai Construction and Syntek Semiconductor.
Diversification Opportunities for Lihtai Construction and Syntek Semiconductor
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lihtai and Syntek is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Lihtai Construction Enterprise and Syntek Semiconductor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Syntek Semiconductor and Lihtai Construction 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 Lihtai Construction Enterprise are associated (or correlated) with Syntek Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Syntek Semiconductor has no effect on the direction of Lihtai Construction i.e., Lihtai Construction and Syntek Semiconductor go up and down completely randomly.
Pair Corralation between Lihtai Construction and Syntek Semiconductor
Assuming the 90 days trading horizon Lihtai Construction Enterprise is expected to generate 0.09 times more return on investment than Syntek Semiconductor. However, Lihtai Construction Enterprise is 10.6 times less risky than Syntek Semiconductor. It trades about -0.02 of its potential returns per unit of risk. Syntek Semiconductor Co is currently generating about -0.05 per unit of risk. If you would invest 8,150 in Lihtai Construction Enterprise on October 14, 2024 and sell it today you would lose (10.00) from holding Lihtai Construction Enterprise or give up 0.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lihtai Construction Enterprise vs. Syntek Semiconductor Co
Performance |
| Timeline |
| Lihtai Construction |
| Syntek Semiconductor |
Lihtai Construction and Syntek Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lihtai Construction and Syntek Semiconductor
The main advantage of trading using opposite Lihtai Construction and Syntek Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lihtai Construction position performs unexpectedly, Syntek Semiconductor 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 Syntek Semiconductor will offset losses from the drop in Syntek Semiconductor's long position.| Lihtai Construction vs. Chinese Maritime Transport | Lihtai Construction vs. Chinese Gamer International | Lihtai Construction vs. Tehmag Foods | Lihtai Construction vs. Hunya Foods Co |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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