Correlation Between Ligitek Electronics and Cameo Communications
Can any of the company-specific risk be diversified away by investing in both Ligitek Electronics and Cameo Communications 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 Cameo Communications 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 Cameo Communications, you can compare the effects of market volatilities on Ligitek Electronics and Cameo Communications 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 Cameo Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ligitek Electronics and Cameo Communications.
Diversification Opportunities for Ligitek Electronics and Cameo Communications
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ligitek and Cameo is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Ligitek Electronics Co and Cameo Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cameo Communications 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 Cameo Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cameo Communications has no effect on the direction of Ligitek Electronics i.e., Ligitek Electronics and Cameo Communications go up and down completely randomly.
Pair Corralation between Ligitek Electronics and Cameo Communications
Assuming the 90 days trading horizon Ligitek Electronics Co is expected to generate 1.24 times more return on investment than Cameo Communications. However, Ligitek Electronics is 1.24 times more volatile than Cameo Communications. It trades about 0.07 of its potential returns per unit of risk. Cameo Communications is currently generating about 0.0 per unit of risk. If you would invest 2,080 in Ligitek Electronics Co on August 31, 2024 and sell it today you would earn a total of 1,750 from holding Ligitek Electronics Co or generate 84.13% 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. Cameo Communications
Performance |
| Timeline |
| Ligitek Electronics |
| Cameo Communications |
Ligitek Electronics and Cameo Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ligitek Electronics and Cameo Communications
The main advantage of trading using opposite Ligitek Electronics and Cameo Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ligitek Electronics position performs unexpectedly, Cameo Communications 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 Cameo Communications will offset losses from the drop in Cameo Communications' long position.| Ligitek Electronics vs. Hon Hai Precision | Ligitek Electronics vs. Delta Electronics | Ligitek Electronics vs. LARGAN Precision Co | Ligitek Electronics vs. Yageo Corp |
| Cameo Communications vs. Gemtek Technology Co | Cameo Communications vs. CyberTAN Technology | Cameo Communications vs. Alpha Networks | Cameo Communications vs. D Link Corp |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |