Correlation Between LARGAN Precision and Lin Horn

Can any of the company-specific risk be diversified away by investing in both LARGAN Precision and Lin Horn 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 Lin Horn 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 Lin Horn Technology, you can compare the effects of market volatilities on LARGAN Precision and Lin Horn 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 Lin Horn. Check out your portfolio center. Please also check ongoing floating volatility patterns of LARGAN Precision and Lin Horn.

Diversification Opportunities for LARGAN Precision and Lin Horn

-0.01

Correlation Coefficient

LARGAN Precision  Lin Horn

Good diversification

The 3 months correlation between LARGAN and Lin is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding LARGAN Precision Co and Lin Horn Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lin Horn 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 Lin Horn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lin Horn Technology has no effect on the direction of LARGAN Precision i.e., LARGAN Precision and Lin Horn go up and down completely randomly.

Pair Corralation between LARGAN Precision and Lin Horn

Assuming the 90 days trading horizon LARGAN Precision is expected to generate 18.79 times less return on investment than Lin Horn. But when comparing it to its historical volatility, LARGAN Precision Co is 1.05 times less risky than Lin Horn. It trades about 0.0 of its potential returns per unit of risk. Lin Horn Technology is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  2,380  in Lin Horn Technology on December 20, 2024 and sell it today you would earn a total of  175.00  from holding Lin Horn Technology or generate 7.35% return on investment over 90 days.

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

LARGAN Precision Co  vs.  Lin Horn Technology

LARGAN Precision

Risk-Adjusted Performance

Weak

Over the last 90 days LARGAN Precision Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, LARGAN Precision is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Lin Horn Technology

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Lin Horn Technology are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Lin Horn may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with LARGAN Precision and Lin Horn

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

The idea behind LARGAN Precision Co and Lin Horn Technology 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.