Correlation Between Ligitek Electronics and StShine Optical
Can any of the company-specific risk be diversified away by investing in both Ligitek Electronics and StShine Optical 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 Ligitek Electronics and StShine Optical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ligitek Electronics Co and StShine Optical Co, you can compare the effects of market volatilities on Ligitek Electronics and StShine Optical 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 Ligitek Electronics with a short position of StShine Optical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ligitek Electronics and StShine Optical.
Diversification Opportunities for Ligitek Electronics and StShine Optical
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ligitek and StShine is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Ligitek Electronics Co and StShine Optical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on StShine Optical and Ligitek 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 Ligitek Electronics Co are associated (or correlated) with StShine Optical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of StShine Optical has no effect on the direction of Ligitek Electronics i.e., Ligitek Electronics and StShine Optical go up and down completely randomly.
Pair Corralation between Ligitek Electronics and StShine Optical
Assuming the 90 days trading horizon Ligitek Electronics Co is expected to generate 2.07 times more return on investment than StShine Optical. However, Ligitek Electronics is 2.07 times more volatile than StShine Optical Co. It trades about 0.09 of its potential returns per unit of risk. StShine Optical Co is currently generating about 0.0 per unit of risk. If you would invest 1,547 in Ligitek Electronics Co on September 4, 2024 and sell it today you would earn a total of 2,343 from holding Ligitek Electronics Co or generate 151.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ligitek Electronics Co vs. StShine Optical Co
Performance |
| Timeline |
| Ligitek Electronics |
| StShine Optical |
Ligitek Electronics and StShine Optical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ligitek Electronics and StShine Optical
The main advantage of trading using opposite Ligitek Electronics and StShine Optical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ligitek Electronics position performs unexpectedly, StShine Optical 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 StShine Optical will offset losses from the drop in StShine Optical's long position.| Ligitek Electronics vs. Hon Hai Precision | Ligitek Electronics vs. Delta Electronics | Ligitek Electronics vs. LARGAN Precision Co | Ligitek Electronics vs. AU Optronics |
| StShine Optical vs. Landis Taipei Hotel | StShine Optical vs. Oceanic Beverages Co | StShine Optical vs. Far EasTone Telecommunications | StShine Optical vs. Ambassador Hotel |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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