Correlation Between Leatec Fine and Integrated Service
Can any of the company-specific risk be diversified away by investing in both Leatec Fine and Integrated Service 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 Integrated Service 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 Integrated Service Technology, you can compare the effects of market volatilities on Leatec Fine and Integrated Service 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 Integrated Service. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leatec Fine and Integrated Service.
Diversification Opportunities for Leatec Fine and Integrated Service
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Leatec and Integrated is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Leatec Fine Ceramics and Integrated Service Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integrated Service 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 Integrated Service. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integrated Service has no effect on the direction of Leatec Fine i.e., Leatec Fine and Integrated Service go up and down completely randomly.
Pair Corralation between Leatec Fine and Integrated Service
Assuming the 90 days trading horizon Leatec Fine Ceramics is expected to generate 0.79 times more return on investment than Integrated Service. However, Leatec Fine Ceramics is 1.26 times less risky than Integrated Service. It trades about 0.08 of its potential returns per unit of risk. Integrated Service Technology is currently generating about -0.43 per unit of risk. If you would invest 2,805 in Leatec Fine Ceramics on September 4, 2024 and sell it today you would earn a total of 75.00 from holding Leatec Fine Ceramics or generate 2.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 81.82% |
| Values | Daily Returns |
Leatec Fine Ceramics vs. Integrated Service Technology
Performance |
| Timeline |
| Leatec Fine Ceramics |
| Integrated Service |
Leatec Fine and Integrated Service Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leatec Fine and Integrated Service
The main advantage of trading using opposite Leatec Fine and Integrated Service positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leatec Fine position performs unexpectedly, Integrated Service 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 Integrated Service will offset losses from the drop in Integrated Service's long position.| Leatec Fine vs. Integrated Service Technology | Leatec Fine vs. Li Kang Biomedical | Leatec Fine vs. Voltronic Power Technology | Leatec Fine vs. Tradetool Auto Co |
| Integrated Service vs. Sitronix Technology Corp | Integrated Service vs. Kinsus Interconnect Technology | Integrated Service vs. WiseChip Semiconductor | Integrated Service vs. Novatek Microelectronics Corp |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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