Correlation Between Coloray International and Leaders Technology
Can any of the company-specific risk be diversified away by investing in both Coloray International and Leaders Technology 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 Coloray International and Leaders Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coloray International Investment and Leaders Technology Investment, you can compare the effects of market volatilities on Coloray International and Leaders Technology 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 Coloray International with a short position of Leaders Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coloray International and Leaders Technology.
Diversification Opportunities for Coloray International and Leaders Technology
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Coloray and Leaders is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Coloray International Investme and Leaders Technology Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leaders Technology and Coloray International 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 Coloray International Investment are associated (or correlated) with Leaders Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leaders Technology has no effect on the direction of Coloray International i.e., Coloray International and Leaders Technology go up and down completely randomly.
Pair Corralation between Coloray International and Leaders Technology
Assuming the 90 days trading horizon Coloray International Investment is expected to generate 0.61 times more return on investment than Leaders Technology. However, Coloray International Investment is 1.64 times less risky than Leaders Technology. It trades about 0.56 of its potential returns per unit of risk. Leaders Technology Investment is currently generating about -0.02 per unit of risk. If you would invest 56,900 in Coloray International Investment on October 16, 2024 and sell it today you would earn a total of 14,800 from holding Coloray International Investment or generate 26.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Coloray International Investme vs. Leaders Technology Investment
Performance |
| Timeline |
| Coloray International |
| Leaders Technology |
Coloray International and Leaders Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coloray International and Leaders Technology
The main advantage of trading using opposite Coloray International and Leaders Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coloray International position performs unexpectedly, Leaders Technology 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 Leaders Technology will offset losses from the drop in Leaders Technology's long position.| Coloray International vs. Kakao Games Corp | Coloray International vs. Kbi Metal Co | Coloray International vs. Hanjoo Light Metal | Coloray International vs. Lotte Non Life Insurance |
| Leaders Technology vs. Kumho Petro Chemical | Leaders Technology vs. Hyundai Home Shopping | Leaders Technology vs. Polaris Office Corp | Leaders Technology vs. ABOV Semiconductor 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |