Correlation Between Leatec Fine and Amtran Technology
Can any of the company-specific risk be diversified away by investing in both Leatec Fine and Amtran Technology 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 Leatec Fine and Amtran Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leatec Fine Ceramics and Amtran Technology Co, you can compare the effects of market volatilities on Leatec Fine and Amtran Technology 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 Leatec Fine with a short position of Amtran Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leatec Fine and Amtran Technology.
Diversification Opportunities for Leatec Fine and Amtran Technology
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Leatec and Amtran is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Leatec Fine Ceramics and Amtran Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amtran Technology and Leatec Fine 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 Leatec Fine Ceramics are associated (or correlated) with Amtran Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amtran Technology has no effect on the direction of Leatec Fine i.e., Leatec Fine and Amtran Technology go up and down completely randomly.
Pair Corralation between Leatec Fine and Amtran Technology
Assuming the 90 days trading horizon Leatec Fine Ceramics is expected to under-perform the Amtran Technology. But the stock apears to be less risky and, when comparing its historical volatility, Leatec Fine Ceramics is 1.09 times less risky than Amtran Technology. The stock trades about 0.0 of its potential returns per unit of risk. The Amtran Technology Co is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,200 in Amtran Technology Co on August 24, 2024 and sell it today you would earn a total of 770.00 from holding Amtran Technology Co or generate 64.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Leatec Fine Ceramics vs. Amtran Technology Co
Performance |
| Timeline |
| Leatec Fine Ceramics |
| Amtran Technology |
Leatec Fine and Amtran Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leatec Fine and Amtran Technology
The main advantage of trading using opposite Leatec Fine and Amtran Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leatec Fine position performs unexpectedly, Amtran Technology 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 Amtran Technology will offset losses from the drop in Amtran Technology's long position.| Leatec Fine vs. Ever Clear Environmental Eng | Leatec Fine vs. China Steel Corp | Leatec Fine vs. MedFirst Healthcare Services | Leatec Fine vs. Yieh United Steel |
| Amtran Technology vs. De Licacy Industrial | Amtran Technology vs. Kwong Fong Industries | Amtran Technology vs. Leatec Fine Ceramics | Amtran Technology vs. Information Technology Total |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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