Correlation Between LandMark Optoelectronics and Gloria Material

Can any of the company-specific risk be diversified away by investing in both LandMark Optoelectronics and Gloria Material 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 LandMark Optoelectronics and Gloria Material into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between LandMark Optoelectronics and Gloria Material Technology, you can compare the effects of market volatilities on LandMark Optoelectronics and Gloria Material 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 LandMark Optoelectronics with a short position of Gloria Material. Check out your portfolio center. Please also check ongoing floating volatility patterns of LandMark Optoelectronics and Gloria Material.

Diversification Opportunities for LandMark Optoelectronics and Gloria Material

0.33

Correlation Coefficient

LandMark Optoelectronics  Gloria Material

Weak diversification

The 3 months correlation between LandMark and Gloria is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding LandMark Optoelectronics and Gloria Material Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gloria Material Tech and LandMark Optoelectronics 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 LandMark Optoelectronics are associated (or correlated) with Gloria Material. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gloria Material Tech has no effect on the direction of LandMark Optoelectronics i.e., LandMark Optoelectronics and Gloria Material go up and down completely randomly.

Pair Corralation between LandMark Optoelectronics and Gloria Material

Assuming the 90 days trading horizon LandMark Optoelectronics is expected to generate 1.23 times less return on investment than Gloria Material. In addition to that, LandMark Optoelectronics is 4.44 times more volatile than Gloria Material Technology. It trades about 0.03 of its total potential returns per unit of risk. Gloria Material Technology is currently generating about 0.15 per unit of volatility. If you would invest  4,500  in Gloria Material Technology on December 24, 2024 and sell it today you would earn a total of  450.00  from holding Gloria Material Technology or generate 10.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.25%
Values	Daily Returns

LandMark Optoelectronics  vs.  Gloria Material Technology

LandMark Optoelectronics

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in LandMark Optoelectronics are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, LandMark Optoelectronics may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Gloria Material Tech

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Gloria Material Technology are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Gloria Material may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with LandMark Optoelectronics and Gloria Material

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

The idea behind LandMark Optoelectronics and Gloria Material 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.

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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.