Correlation Between Ligitek Electronics and Tang Eng
Can any of the company-specific risk be diversified away by investing in both Ligitek Electronics and Tang Eng 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 Tang Eng 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 Tang Eng Iron, you can compare the effects of market volatilities on Ligitek Electronics and Tang Eng 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 Tang Eng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ligitek Electronics and Tang Eng.
Diversification Opportunities for Ligitek Electronics and Tang Eng
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ligitek and Tang is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Ligitek Electronics Co and Tang Eng Iron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tang Eng Iron 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 Tang Eng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tang Eng Iron has no effect on the direction of Ligitek Electronics i.e., Ligitek Electronics and Tang Eng go up and down completely randomly.
Pair Corralation between Ligitek Electronics and Tang Eng
Assuming the 90 days trading horizon Ligitek Electronics Co is expected to generate 2.55 times more return on investment than Tang Eng. However, Ligitek Electronics is 2.55 times more volatile than Tang Eng Iron. It trades about 0.2 of its potential returns per unit of risk. Tang Eng Iron is currently generating about -0.12 per unit of risk. If you would invest 3,570 in Ligitek Electronics Co on October 17, 2024 and sell it today you would earn a total of 1,030 from holding Ligitek Electronics Co or generate 28.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ligitek Electronics Co vs. Tang Eng Iron
Performance |
| Timeline |
| Ligitek Electronics |
| Tang Eng Iron |
Ligitek Electronics and Tang Eng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ligitek Electronics and Tang Eng
The main advantage of trading using opposite Ligitek Electronics and Tang Eng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ligitek Electronics position performs unexpectedly, Tang Eng 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 Tang Eng will offset losses from the drop in Tang Eng's long position.| Ligitek Electronics vs. Connection Technology Systems | Ligitek Electronics vs. Unitech Electronics Co | Ligitek Electronics vs. Golden Biotechnology | Ligitek Electronics vs. Microelectronics Technology |
| Tang Eng vs. Compal Electronics | Tang Eng vs. Universal Microelectronics Co | Tang Eng vs. Ligitek Electronics Co | Tang Eng vs. Asmedia Technology |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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