Correlation Between Ieh Corp and LightPath Technologies
Can any of the company-specific risk be diversified away by investing in both Ieh Corp and LightPath Technologies 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 Ieh Corp and LightPath Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ieh Corp and LightPath Technologies, you can compare the effects of market volatilities on Ieh Corp and LightPath Technologies 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 Ieh Corp with a short position of LightPath Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ieh Corp and LightPath Technologies.
Diversification Opportunities for Ieh Corp and LightPath Technologies
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ieh and LightPath is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Ieh Corp and LightPath Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LightPath Technologies and Ieh Corp 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 Ieh Corp are associated (or correlated) with LightPath Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LightPath Technologies has no effect on the direction of Ieh Corp i.e., Ieh Corp and LightPath Technologies go up and down completely randomly.
Pair Corralation between Ieh Corp and LightPath Technologies
Given the investment horizon of 90 days Ieh Corp is expected to generate 1.17 times less return on investment than LightPath Technologies. In addition to that, Ieh Corp is 1.44 times more volatile than LightPath Technologies. It trades about 0.03 of its total potential returns per unit of risk. LightPath Technologies is currently generating about 0.06 per unit of volatility. If you would invest 132.00 in LightPath Technologies on September 4, 2024 and sell it today you would earn a total of 51.00 from holding LightPath Technologies or generate 38.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Ieh Corp vs. LightPath Technologies
Performance |
| Timeline |
| Ieh Corp |
| LightPath Technologies |
Ieh Corp and LightPath Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ieh Corp and LightPath Technologies
The main advantage of trading using opposite Ieh Corp and LightPath Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ieh Corp position performs unexpectedly, LightPath Technologies 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 LightPath Technologies will offset losses from the drop in LightPath Technologies' long position.| Ieh Corp vs. LGL Group | Ieh Corp vs. Deswell Industries | Ieh Corp vs. M tron Industries | Ieh Corp vs. Micropac Industries |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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