Correlation Between Lotes and Ingentec
Can any of the company-specific risk be diversified away by investing in both Lotes and Ingentec 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 Lotes and Ingentec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lotes Co and Ingentec, you can compare the effects of market volatilities on Lotes and Ingentec 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 Lotes with a short position of Ingentec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotes and Ingentec.
Diversification Opportunities for Lotes and Ingentec
Pay attention - limited upside
The 3 months correlation between Lotes and Ingentec is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Lotes Co and Ingentec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ingentec and Lotes 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 Lotes Co are associated (or correlated) with Ingentec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ingentec has no effect on the direction of Lotes i.e., Lotes and Ingentec go up and down completely randomly.
Pair Corralation between Lotes and Ingentec
Assuming the 90 days trading horizon Lotes Co is expected to generate 1.17 times more return on investment than Ingentec. However, Lotes is 1.17 times more volatile than Ingentec. It trades about 0.07 of its potential returns per unit of risk. Ingentec is currently generating about -0.08 per unit of risk. If you would invest 156,000 in Lotes Co on October 4, 2024 and sell it today you would earn a total of 39,500 from holding Lotes Co or generate 25.32% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Lotes Co vs. Ingentec
Performance |
Timeline |
Lotes |
Ingentec |
Lotes and Ingentec Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Lotes and Ingentec
The main advantage of trading using opposite Lotes and Ingentec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotes position performs unexpectedly, Ingentec 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 Ingentec will offset losses from the drop in Ingentec's long position.Lotes vs. Charoen Pokphand Enterprise | Lotes vs. Taiwan Secom Co | Lotes vs. Ruentex Development Co | Lotes vs. Symtek Automation Asia |
Ingentec vs. Delta Electronics | Ingentec vs. China Steel Chemical | Ingentec vs. Ruentex Development Co | Ingentec vs. Symtek Automation Asia |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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