Correlation Between Lanner Electronics and IBASE Technology
Can any of the company-specific risk be diversified away by investing in both Lanner Electronics and IBASE 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 Lanner Electronics and IBASE Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lanner Electronics and IBASE Technology, you can compare the effects of market volatilities on Lanner Electronics and IBASE 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 Lanner Electronics with a short position of IBASE Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lanner Electronics and IBASE Technology.
Diversification Opportunities for Lanner Electronics and IBASE Technology
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lanner and IBASE is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Lanner Electronics and IBASE Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IBASE Technology and Lanner Electronics 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 Lanner Electronics are associated (or correlated) with IBASE Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IBASE Technology has no effect on the direction of Lanner Electronics i.e., Lanner Electronics and IBASE Technology go up and down completely randomly.
Pair Corralation between Lanner Electronics and IBASE Technology
Assuming the 90 days trading horizon Lanner Electronics is expected to generate 1.17 times more return on investment than IBASE Technology. However, Lanner Electronics is 1.17 times more volatile than IBASE Technology. It trades about 0.02 of its potential returns per unit of risk. IBASE Technology is currently generating about -0.14 per unit of risk. If you would invest 8,910 in Lanner Electronics on August 31, 2024 and sell it today you would earn a total of 80.00 from holding Lanner Electronics or generate 0.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.73% |
| Values | Daily Returns |
Lanner Electronics vs. IBASE Technology
Performance |
| Timeline |
| Lanner Electronics |
| IBASE Technology |
Lanner Electronics and IBASE Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lanner Electronics and IBASE Technology
The main advantage of trading using opposite Lanner Electronics and IBASE Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lanner Electronics position performs unexpectedly, IBASE 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 IBASE Technology will offset losses from the drop in IBASE Technology's long position.| Lanner Electronics vs. Advantech Co | Lanner Electronics vs. IBASE Technology | Lanner Electronics vs. Phison Electronics | Lanner Electronics vs. Axiomtek Co |
| IBASE Technology vs. Axiomtek Co | IBASE Technology vs. Lanner Electronics | IBASE Technology vs. IEI Integration Corp | IBASE Technology vs. Advantech 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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