Correlation Between Lanner Electronics and Ampire

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

By analyzing existing cross correlation between Lanner Electronics and Ampire Co, you can compare the effects of market volatilities on Lanner Electronics and Ampire 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 Lanner Electronics with a short position of Ampire. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lanner Electronics and Ampire.

Diversification Opportunities for Lanner Electronics and Ampire

0.66

Correlation Coefficient

Lanner Electronics  Ampire

Poor diversification

The 3 months correlation between Lanner and Ampire is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Lanner Electronics and Ampire Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ampire and Lanner Electronics 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 Lanner Electronics are associated (or correlated) with Ampire. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ampire has no effect on the direction of Lanner Electronics i.e., Lanner Electronics and Ampire go up and down completely randomly.

Pair Corralation between Lanner Electronics and Ampire

Assuming the 90 days trading horizon Lanner Electronics is expected to generate 3.22 times more return on investment than Ampire. However, Lanner Electronics is 3.22 times more volatile than Ampire Co. It trades about 0.06 of its potential returns per unit of risk. Ampire Co is currently generating about 0.02 per unit of risk. If you would invest  9,200  in Lanner Electronics on December 30, 2024 and sell it today you would earn a total of  750.00  from holding Lanner Electronics or generate 8.15% return on investment over 90 days.

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

Lanner Electronics  vs.  Ampire Co

Lanner Electronics

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Lanner Electronics are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Lanner Electronics may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Ampire

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ampire Co are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Ampire is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Lanner Electronics and Ampire

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

The idea behind Lanner Electronics and Ampire Co 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..