Correlation Between DV Biomed and Ligitek Electronics
Can any of the company-specific risk be diversified away by investing in both DV Biomed and Ligitek Electronics 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 DV Biomed and Ligitek Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DV Biomed Co and Ligitek Electronics Co, you can compare the effects of market volatilities on DV Biomed and Ligitek Electronics 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 DV Biomed with a short position of Ligitek Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of DV Biomed and Ligitek Electronics.
Diversification Opportunities for DV Biomed and Ligitek Electronics
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 6539 and Ligitek is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding DV Biomed Co and Ligitek Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ligitek Electronics and DV Biomed 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 DV Biomed Co are associated (or correlated) with Ligitek Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ligitek Electronics has no effect on the direction of DV Biomed i.e., DV Biomed and Ligitek Electronics go up and down completely randomly.
Pair Corralation between DV Biomed and Ligitek Electronics
Assuming the 90 days trading horizon DV Biomed Co is expected to generate 0.24 times more return on investment than Ligitek Electronics. However, DV Biomed Co is 4.24 times less risky than Ligitek Electronics. It trades about -0.12 of its potential returns per unit of risk. Ligitek Electronics Co is currently generating about -0.17 per unit of risk. If you would invest 6,780 in DV Biomed Co on September 4, 2024 and sell it today you would lose (120.00) from holding DV Biomed Co or give up 1.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
DV Biomed Co vs. Ligitek Electronics Co
Performance |
| Timeline |
| DV Biomed |
| Ligitek Electronics |
DV Biomed and Ligitek Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DV Biomed and Ligitek Electronics
The main advantage of trading using opposite DV Biomed and Ligitek Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DV Biomed position performs unexpectedly, Ligitek Electronics 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 Ligitek Electronics will offset losses from the drop in Ligitek Electronics' long position.| DV Biomed vs. GeneFerm Biotechnology Co | DV Biomed vs. Ruentex Development Co | DV Biomed vs. Symtek Automation Asia | DV Biomed vs. CTCI Corp |
| Ligitek Electronics vs. Hon Hai Precision | Ligitek Electronics vs. Delta Electronics | Ligitek Electronics vs. LARGAN Precision Co | Ligitek Electronics vs. AU Optronics |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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