Correlation Between Great Computer and Ligitek Electronics
Can any of the company-specific risk be diversified away by investing in both Great Computer 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 Great Computer and Ligitek Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Great Computer and Ligitek Electronics Co, you can compare the effects of market volatilities on Great Computer 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 Great Computer with a short position of Ligitek Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great Computer and Ligitek Electronics.
Diversification Opportunities for Great Computer and Ligitek Electronics
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Great and Ligitek is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Great Computer and Ligitek Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ligitek Electronics and Great Computer 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 Great Computer 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 Great Computer i.e., Great Computer and Ligitek Electronics go up and down completely randomly.
Pair Corralation between Great Computer and Ligitek Electronics
Assuming the 90 days trading horizon Great Computer is expected to under-perform the Ligitek Electronics. In addition to that, Great Computer is 1.13 times more volatile than Ligitek Electronics Co. It trades about -0.11 of its total potential returns per unit of risk. Ligitek Electronics Co is currently generating about 0.05 per unit of volatility. If you would invest 5,220 in Ligitek Electronics Co on October 20, 2024 and sell it today you would earn a total of 140.00 from holding Ligitek Electronics Co or generate 2.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Great Computer vs. Ligitek Electronics Co
Performance |
| Timeline |
| Great Computer |
| Ligitek Electronics |
Great Computer and Ligitek Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Great Computer and Ligitek Electronics
The main advantage of trading using opposite Great Computer and Ligitek Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great Computer 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.| Great Computer vs. Lihtai Construction Enterprise | Great Computer vs. Weltrend Semiconductor | Great Computer vs. Winstek Semiconductor Co | Great Computer vs. RDC Semiconductor Co |
| Ligitek Electronics vs. Excellence Optoelectronic | Ligitek Electronics vs. Taichung Commercial Bank | Ligitek Electronics vs. Everlight Electronics Co | Ligitek Electronics vs. Sinopac Financial Holdings |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |