Correlation Between RiTdisplay Corp and Ligitek Electronics
Can any of the company-specific risk be diversified away by investing in both RiTdisplay Corp 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 RiTdisplay Corp and Ligitek Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RiTdisplay Corp and Ligitek Electronics Co, you can compare the effects of market volatilities on RiTdisplay Corp 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 RiTdisplay Corp with a short position of Ligitek Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of RiTdisplay Corp and Ligitek Electronics.
Diversification Opportunities for RiTdisplay Corp and Ligitek Electronics
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between RiTdisplay and Ligitek is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding RiTdisplay Corp and Ligitek Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ligitek Electronics and RiTdisplay Corp 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 RiTdisplay Corp 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 RiTdisplay Corp i.e., RiTdisplay Corp and Ligitek Electronics go up and down completely randomly.
Pair Corralation between RiTdisplay Corp and Ligitek Electronics
Assuming the 90 days trading horizon RiTdisplay Corp is expected to generate 2.07 times less return on investment than Ligitek Electronics. In addition to that, RiTdisplay Corp is 1.04 times more volatile than Ligitek Electronics Co. It trades about 0.06 of its total potential returns per unit of risk. Ligitek Electronics Co is currently generating about 0.13 per unit of volatility. If you would invest 1,870 in Ligitek Electronics Co on September 14, 2024 and sell it today you would earn a total of 2,665 from holding Ligitek Electronics Co or generate 142.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
RiTdisplay Corp vs. Ligitek Electronics Co
Performance |
| Timeline |
| RiTdisplay Corp |
| Ligitek Electronics |
RiTdisplay Corp and Ligitek Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RiTdisplay Corp and Ligitek Electronics
The main advantage of trading using opposite RiTdisplay Corp and Ligitek Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RiTdisplay Corp 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.| RiTdisplay Corp vs. ANJI Technology Co | RiTdisplay Corp vs. Kinko Optical Co | RiTdisplay Corp vs. Emerging Display Technologies | RiTdisplay Corp vs. Epileds Technologies |
| Ligitek Electronics vs. ANJI Technology Co | Ligitek Electronics vs. Emerging Display Technologies | Ligitek Electronics vs. U Tech Media Corp | Ligitek Electronics vs. Ruentex Development 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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