Correlation Between Ligitek Electronics and Scan D
Can any of the company-specific risk be diversified away by investing in both Ligitek Electronics and Scan D 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 Scan D 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 Scan D, you can compare the effects of market volatilities on Ligitek Electronics and Scan D 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 Scan D. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ligitek Electronics and Scan D.
Diversification Opportunities for Ligitek Electronics and Scan D
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ligitek and Scan is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Ligitek Electronics Co and Scan D in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scan D 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 Scan D. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scan D has no effect on the direction of Ligitek Electronics i.e., Ligitek Electronics and Scan D go up and down completely randomly.
Pair Corralation between Ligitek Electronics and Scan D
Assuming the 90 days trading horizon Ligitek Electronics Co is expected to generate 2.97 times more return on investment than Scan D. However, Ligitek Electronics is 2.97 times more volatile than Scan D. It trades about 0.1 of its potential returns per unit of risk. Scan D is currently generating about -0.03 per unit of risk. If you would invest 1,547 in Ligitek Electronics Co on October 30, 2024 and sell it today you would earn a total of 3,653 from holding Ligitek Electronics Co or generate 236.13% 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. Scan D
Performance |
| Timeline |
| Ligitek Electronics |
| Scan D |
Ligitek Electronics and Scan D Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ligitek Electronics and Scan D
The main advantage of trading using opposite Ligitek Electronics and Scan D positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ligitek Electronics position performs unexpectedly, Scan D 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 Scan D will offset losses from the drop in Scan D's long position.| Ligitek Electronics vs. Advantech Co | Ligitek Electronics vs. IEI Integration Corp | Ligitek Electronics vs. Flytech Technology Co | Ligitek Electronics vs. Ennoconn Corp |
| Scan D vs. Tehmag Foods | Scan D vs. Air Asia Co | Scan D vs. Tait Marketing Distribution | Scan D vs. U Media Communications |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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