Correlation Between Ligitek Electronics and Integrated Service
Can any of the company-specific risk be diversified away by investing in both Ligitek Electronics and Integrated Service 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 Integrated Service 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 Integrated Service Technology, you can compare the effects of market volatilities on Ligitek Electronics and Integrated Service 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 Integrated Service. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ligitek Electronics and Integrated Service.
Diversification Opportunities for Ligitek Electronics and Integrated Service
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ligitek and Integrated is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Ligitek Electronics Co and Integrated Service Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integrated Service 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 Integrated Service. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integrated Service has no effect on the direction of Ligitek Electronics i.e., Ligitek Electronics and Integrated Service go up and down completely randomly.
Pair Corralation between Ligitek Electronics and Integrated Service
Assuming the 90 days trading horizon Ligitek Electronics Co is expected to generate 0.89 times more return on investment than Integrated Service. However, Ligitek Electronics Co is 1.12 times less risky than Integrated Service. It trades about 0.09 of its potential returns per unit of risk. Integrated Service Technology is currently generating about 0.06 per unit of risk. If you would invest 1,443 in Ligitek Electronics Co on August 26, 2024 and sell it today you would earn a total of 2,257 from holding Ligitek Electronics Co or generate 156.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.78% |
| Values | Daily Returns |
Ligitek Electronics Co vs. Integrated Service Technology
Performance |
| Timeline |
| Ligitek Electronics |
| Integrated Service |
Ligitek Electronics and Integrated Service Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ligitek Electronics and Integrated Service
The main advantage of trading using opposite Ligitek Electronics and Integrated Service positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ligitek Electronics position performs unexpectedly, Integrated Service 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 Integrated Service will offset losses from the drop in Integrated Service's long position.| Ligitek Electronics vs. Unique Optical Industrial | Ligitek Electronics vs. Powertech Industrial Co | Ligitek Electronics vs. Insyde Software | Ligitek Electronics vs. Central Reinsurance Corp |
| Integrated Service vs. U Ming Marine Transport | Integrated Service vs. Shan Loong Transportation Co | Integrated Service vs. Microelectronics Technology | Integrated Service vs. Ligitek Electronics 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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