Correlation Between ANJI Technology and LandMark Optoelectronics
Can any of the company-specific risk be diversified away by investing in both ANJI Technology and LandMark Optoelectronics 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 ANJI Technology and LandMark Optoelectronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ANJI Technology Co and LandMark Optoelectronics, you can compare the effects of market volatilities on ANJI Technology and LandMark Optoelectronics 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 ANJI Technology with a short position of LandMark Optoelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANJI Technology and LandMark Optoelectronics.
Diversification Opportunities for ANJI Technology and LandMark Optoelectronics
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ANJI and LandMark is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding ANJI Technology Co and LandMark Optoelectronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LandMark Optoelectronics and ANJI 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 ANJI Technology Co are associated (or correlated) with LandMark Optoelectronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LandMark Optoelectronics has no effect on the direction of ANJI Technology i.e., ANJI Technology and LandMark Optoelectronics go up and down completely randomly.
Pair Corralation between ANJI Technology and LandMark Optoelectronics
Assuming the 90 days trading horizon ANJI Technology is expected to generate 1.2 times less return on investment than LandMark Optoelectronics. In addition to that, ANJI Technology is 1.04 times more volatile than LandMark Optoelectronics. It trades about 0.42 of its total potential returns per unit of risk. LandMark Optoelectronics is currently generating about 0.53 per unit of volatility. If you would invest 35,100 in LandMark Optoelectronics on October 25, 2024 and sell it today you would earn a total of 17,800 from holding LandMark Optoelectronics or generate 50.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ANJI Technology Co vs. LandMark Optoelectronics
Performance |
| Timeline |
| ANJI Technology |
| LandMark Optoelectronics |
ANJI Technology and LandMark Optoelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ANJI Technology and LandMark Optoelectronics
The main advantage of trading using opposite ANJI Technology and LandMark Optoelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANJI Technology position performs unexpectedly, LandMark Optoelectronics 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 LandMark Optoelectronics will offset losses from the drop in LandMark Optoelectronics' long position.| ANJI Technology vs. TSEC Corp | ANJI Technology vs. United Renewable Energy | ANJI Technology vs. Tainergy Tech Co | ANJI Technology vs. Motech Industries 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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