Correlation Between Pan Jit and Lelon Electronics

Can any of the company-specific risk be diversified away by investing in both Pan Jit and Lelon 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 Pan Jit and Lelon Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Pan Jit International and Lelon Electronics Corp, you can compare the effects of market volatilities on Pan Jit and Lelon 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 Pan Jit with a short position of Lelon Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pan Jit and Lelon Electronics.

Diversification Opportunities for Pan Jit and Lelon Electronics

-0.58

Correlation Coefficient

Pan Jit  Lelon Electronics

Excellent diversification

The 3 months correlation between Pan and Lelon is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Pan Jit International and Lelon Electronics Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lelon Electronics Corp and Pan Jit 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 Pan Jit International are associated (or correlated) with Lelon Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lelon Electronics Corp has no effect on the direction of Pan Jit i.e., Pan Jit and Lelon Electronics go up and down completely randomly.

Pair Corralation between Pan Jit and Lelon Electronics

Assuming the 90 days trading horizon Pan Jit International is expected to under-perform the Lelon Electronics. But the stock apears to be less risky and, when comparing its historical volatility, Pan Jit International is 2.05 times less risky than Lelon Electronics. The stock trades about -0.15 of its potential returns per unit of risk. The Lelon Electronics Corp is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  8,130  in Lelon Electronics Corp on October 20, 2024 and sell it today you would earn a total of  1,060  from holding Lelon Electronics Corp or generate 13.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Pan Jit International  vs.  Lelon Electronics Corp

Pan Jit International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pan Jit International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Lelon Electronics Corp

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Lelon Electronics Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Lelon Electronics showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Pan Jit and Lelon Electronics

The main advantage of trading using opposite Pan Jit and Lelon Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pan Jit position performs unexpectedly, Lelon 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 Lelon Electronics will offset losses from the drop in Lelon Electronics' long position.

The idea behind Pan Jit International and Lelon Electronics Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 CEOs Directory module to screen CEOs from public companies around the world.