Correlation Between TTM Technologies and LGL
Can any of the company-specific risk be diversified away by investing in both TTM Technologies and LGL 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 TTM Technologies and LGL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TTM Technologies and LGL Group, you can compare the effects of market volatilities on TTM Technologies and LGL 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 TTM Technologies with a short position of LGL. Check out your portfolio center. Please also check ongoing floating volatility patterns of TTM Technologies and LGL.
Diversification Opportunities for TTM Technologies and LGL
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between TTM and LGL is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding TTM Technologies and LGL Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LGL Group and TTM Technologies 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 TTM Technologies are associated (or correlated) with LGL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LGL Group has no effect on the direction of TTM Technologies i.e., TTM Technologies and LGL go up and down completely randomly.
Pair Corralation between TTM Technologies and LGL
Given the investment horizon of 90 days TTM Technologies is expected to generate 1.62 times more return on investment than LGL. However, TTM Technologies is 1.62 times more volatile than LGL Group. It trades about 0.31 of its potential returns per unit of risk. LGL Group is currently generating about 0.07 per unit of risk. If you would invest 1,857 in TTM Technologies on August 24, 2024 and sell it today you would earn a total of 507.00 from holding TTM Technologies or generate 27.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
TTM Technologies vs. LGL Group
Performance |
| Timeline |
| TTM Technologies |
| LGL Group |
TTM Technologies and LGL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TTM Technologies and LGL
The main advantage of trading using opposite TTM Technologies and LGL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TTM Technologies position performs unexpectedly, LGL 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 LGL will offset losses from the drop in LGL's long position.| TTM Technologies vs. Sanmina | TTM Technologies vs. Benchmark Electronics | TTM Technologies vs. Methode Electronics | TTM Technologies vs. OSI Systems |
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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