Correlation Between Te Chang and Leader Electronics
Can any of the company-specific risk be diversified away by investing in both Te Chang and Leader 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 Te Chang and Leader Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Te Chang Construction and Leader Electronics, you can compare the effects of market volatilities on Te Chang and Leader 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 Te Chang with a short position of Leader Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Te Chang and Leader Electronics.
Diversification Opportunities for Te Chang and Leader Electronics
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 5511 and Leader is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Te Chang Construction and Leader Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leader Electronics and Te Chang 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 Te Chang Construction are associated (or correlated) with Leader Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leader Electronics has no effect on the direction of Te Chang i.e., Te Chang and Leader Electronics go up and down completely randomly.
Pair Corralation between Te Chang and Leader Electronics
Assuming the 90 days trading horizon Te Chang Construction is expected to generate 0.43 times more return on investment than Leader Electronics. However, Te Chang Construction is 2.32 times less risky than Leader Electronics. It trades about 0.17 of its potential returns per unit of risk. Leader Electronics is currently generating about -0.08 per unit of risk. If you would invest 5,650 in Te Chang Construction on October 1, 2024 and sell it today you would earn a total of 600.00 from holding Te Chang Construction or generate 10.62% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Te Chang Construction vs. Leader Electronics
Performance |
Timeline |
Te Chang Construction |
Leader Electronics |
Te Chang and Leader Electronics Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Te Chang and Leader Electronics
The main advantage of trading using opposite Te Chang and Leader Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Te Chang position performs unexpectedly, Leader 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 Leader Electronics will offset losses from the drop in Leader Electronics' long position.Te Chang vs. Ruentex Development Co | ||
Te Chang vs. United Integrated Services | ||
Te Chang vs. CTCI Corp | ||
Te Chang vs. Continental Holdings Corp |
Leader Electronics vs. Altek Corp | ||
Leader Electronics vs. Promise Technology | ||
Leader Electronics vs. Edom Technology Co | ||
Leader Electronics vs. Spirox 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
Bonds Directory Find actively traded corporate debentures issued by US companies | |
Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |