Correlation Between Phison Electronics and Lanner Electronics
Can any of the company-specific risk be diversified away by investing in both Phison Electronics and Lanner Electronics 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 Phison Electronics and Lanner Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Phison Electronics and Lanner Electronics, you can compare the effects of market volatilities on Phison Electronics and Lanner Electronics 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 Phison Electronics with a short position of Lanner Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Phison Electronics and Lanner Electronics.
Diversification Opportunities for Phison Electronics and Lanner Electronics
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Phison and Lanner is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Phison Electronics and Lanner Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lanner Electronics and Phison 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 Phison Electronics are associated (or correlated) with Lanner Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lanner Electronics has no effect on the direction of Phison Electronics i.e., Phison Electronics and Lanner Electronics go up and down completely randomly.
Pair Corralation between Phison Electronics and Lanner Electronics
Assuming the 90 days trading horizon Phison Electronics is expected to under-perform the Lanner Electronics. In addition to that, Phison Electronics is 1.85 times more volatile than Lanner Electronics. It trades about -0.07 of its total potential returns per unit of risk. Lanner Electronics is currently generating about 0.02 per unit of volatility. If you would invest 8,950 in Lanner Electronics on August 31, 2024 and sell it today you would earn a total of 40.00 from holding Lanner Electronics or generate 0.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Phison Electronics vs. Lanner Electronics
Performance |
| Timeline |
| Phison Electronics |
| Lanner Electronics |
Phison Electronics and Lanner Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Phison Electronics and Lanner Electronics
The main advantage of trading using opposite Phison Electronics and Lanner Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Phison Electronics position performs unexpectedly, Lanner Electronics 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 Lanner Electronics will offset losses from the drop in Lanner Electronics' long position.| Phison Electronics vs. Syscom Computer Engineering | Phison Electronics vs. Voltronic Power Technology | Phison Electronics vs. Tehmag Foods | Phison Electronics vs. Great Computer |
| Lanner Electronics vs. Advantech Co | Lanner Electronics vs. IBASE Technology | Lanner Electronics vs. Phison Electronics | Lanner Electronics vs. Axiomtek 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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