Correlation Between Leatec Fine and Gold Rain
Can any of the company-specific risk be diversified away by investing in both Leatec Fine and Gold Rain 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 Gold Rain 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 Gold Rain Enterprises, you can compare the effects of market volatilities on Leatec Fine and Gold Rain 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 Gold Rain. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leatec Fine and Gold Rain.
Diversification Opportunities for Leatec Fine and Gold Rain
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Leatec and Gold is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Leatec Fine Ceramics and Gold Rain Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Rain Enterprises 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 Gold Rain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Rain Enterprises has no effect on the direction of Leatec Fine i.e., Leatec Fine and Gold Rain go up and down completely randomly.
Pair Corralation between Leatec Fine and Gold Rain
Assuming the 90 days trading horizon Leatec Fine Ceramics is expected to under-perform the Gold Rain. But the stock apears to be less risky and, when comparing its historical volatility, Leatec Fine Ceramics is 1.74 times less risky than Gold Rain. The stock trades about -0.35 of its potential returns per unit of risk. The Gold Rain Enterprises is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 5,000 in Gold Rain Enterprises on October 28, 2024 and sell it today you would earn a total of 490.00 from holding Gold Rain Enterprises or generate 9.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Leatec Fine Ceramics vs. Gold Rain Enterprises
Performance |
| Timeline |
| Leatec Fine Ceramics |
| Gold Rain Enterprises |
Leatec Fine and Gold Rain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leatec Fine and Gold Rain
The main advantage of trading using opposite Leatec Fine and Gold Rain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leatec Fine position performs unexpectedly, Gold Rain 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 Gold Rain will offset losses from the drop in Gold Rain's long position.| Leatec Fine vs. WIN Semiconductors | Leatec Fine vs. Visual Photonics Epitaxy | Leatec Fine vs. GlobalWafers Co | Leatec Fine vs. Unimicron Technology Corp |
| Gold Rain vs. Niko Semiconductor Co | Gold Rain vs. PChome Online | Gold Rain vs. Advanced Wireless Semiconductor | Gold Rain vs. Vanguard International Semiconductor |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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