Correlation Between Liton Technology and Xxentria Technology
Can any of the company-specific risk be diversified away by investing in both Liton Technology and Xxentria 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 Liton Technology and Xxentria Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Liton Technology and Xxentria Technology Materials, you can compare the effects of market volatilities on Liton Technology and Xxentria 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 Liton Technology with a short position of Xxentria Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liton Technology and Xxentria Technology.
Diversification Opportunities for Liton Technology and Xxentria Technology
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Liton and Xxentria is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Liton Technology and Xxentria Technology Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xxentria Technology and Liton Technology 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 Liton Technology are associated (or correlated) with Xxentria Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xxentria Technology has no effect on the direction of Liton Technology i.e., Liton Technology and Xxentria Technology go up and down completely randomly.
Pair Corralation between Liton Technology and Xxentria Technology
Assuming the 90 days trading horizon Liton Technology is expected to generate 2.42 times more return on investment than Xxentria Technology. However, Liton Technology is 2.42 times more volatile than Xxentria Technology Materials. It trades about 0.12 of its potential returns per unit of risk. Xxentria Technology Materials is currently generating about 0.19 per unit of risk. If you would invest 4,070 in Liton Technology on October 26, 2024 and sell it today you would earn a total of 290.00 from holding Liton Technology or generate 7.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Liton Technology vs. Xxentria Technology Materials
Performance |
| Timeline |
| Liton Technology |
| Xxentria Technology |
Liton Technology and Xxentria Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liton Technology and Xxentria Technology
The main advantage of trading using opposite Liton Technology and Xxentria Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liton Technology position performs unexpectedly, Xxentria 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 Xxentria Technology will offset losses from the drop in Xxentria Technology's long position.| Liton Technology vs. Prosperity Dielectrics Co | Liton Technology vs. Lelon Electronics Corp | Liton Technology vs. Wafer Works | Liton Technology vs. Kaimei Electronic Corp |
| Xxentria Technology vs. Hota Industrial Mfg | Xxentria Technology vs. Poya International Co | Xxentria Technology vs. Macauto Industrial Co | Xxentria Technology vs. Actron 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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