Correlation Between Top Glove and LeMaitre Vascular
Can any of the company-specific risk be diversified away by investing in both Top Glove and LeMaitre Vascular 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 Top Glove and LeMaitre Vascular into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Top Glove and LeMaitre Vascular, you can compare the effects of market volatilities on Top Glove and LeMaitre Vascular 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 Top Glove with a short position of LeMaitre Vascular. Check out your portfolio center. Please also check ongoing floating volatility patterns of Top Glove and LeMaitre Vascular.
Diversification Opportunities for Top Glove and LeMaitre Vascular
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Top and LeMaitre is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Top Glove and LeMaitre Vascular in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LeMaitre Vascular and Top Glove 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 Top Glove are associated (or correlated) with LeMaitre Vascular. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LeMaitre Vascular has no effect on the direction of Top Glove i.e., Top Glove and LeMaitre Vascular go up and down completely randomly.
Pair Corralation between Top Glove and LeMaitre Vascular
Assuming the 90 days horizon Top Glove is expected to generate 2.98 times more return on investment than LeMaitre Vascular. However, Top Glove is 2.98 times more volatile than LeMaitre Vascular. It trades about 0.12 of its potential returns per unit of risk. LeMaitre Vascular is currently generating about 0.2 per unit of risk. If you would invest 18.00 in Top Glove on August 24, 2024 and sell it today you would earn a total of 5.00 from holding Top Glove or generate 27.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Top Glove vs. LeMaitre Vascular
Performance |
| Timeline |
| Top Glove |
| LeMaitre Vascular |
Top Glove and LeMaitre Vascular Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Top Glove and LeMaitre Vascular
The main advantage of trading using opposite Top Glove and LeMaitre Vascular positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Top Glove position performs unexpectedly, LeMaitre Vascular 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 LeMaitre Vascular will offset losses from the drop in LeMaitre Vascular's long position.| Top Glove vs. Lion One Metals | Top Glove vs. Olympic Steel | Top Glove vs. Summit Environmental | Top Glove vs. United States Steel |
| LeMaitre Vascular vs. InfuSystems Holdings | LeMaitre Vascular vs. Pro Dex | LeMaitre Vascular vs. Utah Medical Products | LeMaitre Vascular vs. Milestone Scientific |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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