Correlation Between LARGAN Precision and Catcher Technology
Can any of the company-specific risk be diversified away by investing in both LARGAN Precision and Catcher 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 LARGAN Precision and Catcher Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LARGAN Precision Co and Catcher Technology Co, you can compare the effects of market volatilities on LARGAN Precision and Catcher 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 LARGAN Precision with a short position of Catcher Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of LARGAN Precision and Catcher Technology.
Diversification Opportunities for LARGAN Precision and Catcher Technology
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between LARGAN and Catcher is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding LARGAN Precision Co and Catcher Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catcher Technology and LARGAN Precision 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 LARGAN Precision Co are associated (or correlated) with Catcher Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catcher Technology has no effect on the direction of LARGAN Precision i.e., LARGAN Precision and Catcher Technology go up and down completely randomly.
Pair Corralation between LARGAN Precision and Catcher Technology
Assuming the 90 days trading horizon LARGAN Precision Co is expected to under-perform the Catcher Technology. In addition to that, LARGAN Precision is 1.8 times more volatile than Catcher Technology Co. It trades about -0.17 of its total potential returns per unit of risk. Catcher Technology Co is currently generating about 0.31 per unit of volatility. If you would invest 19,750 in Catcher Technology Co on December 2, 2024 and sell it today you would earn a total of 900.00 from holding Catcher Technology Co or generate 4.56% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
LARGAN Precision Co vs. Catcher Technology Co
Performance |
Timeline |
LARGAN Precision |
Catcher Technology |
LARGAN Precision and Catcher Technology Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with LARGAN Precision and Catcher Technology
The main advantage of trading using opposite LARGAN Precision and Catcher Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LARGAN Precision position performs unexpectedly, Catcher 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 Catcher Technology will offset losses from the drop in Catcher Technology's long position.LARGAN Precision vs. MediaTek | LARGAN Precision vs. Hon Hai Precision | LARGAN Precision vs. Delta Electronics | LARGAN Precision vs. Catcher Technology Co |
Catcher Technology vs. LARGAN Precision Co | Catcher Technology vs. Delta Electronics | Catcher Technology vs. Quanta Computer | Catcher Technology vs. Pegatron Corp |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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