Correlation Between Voltronic Power and Liton Technology

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

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

Diversification Opportunities for Voltronic Power and Liton Technology

-0.64

Correlation Coefficient

Voltronic Power  Liton Technology

Excellent diversification

The 3 months correlation between Voltronic and Liton is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Voltronic Power Technology and Liton Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liton Technology and Voltronic Power 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 Voltronic Power Technology are associated (or correlated) with Liton Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liton Technology has no effect on the direction of Voltronic Power i.e., Voltronic Power and Liton Technology go up and down completely randomly.

Pair Corralation between Voltronic Power and Liton Technology

Assuming the 90 days trading horizon Voltronic Power Technology is expected to generate 1.51 times more return on investment than Liton Technology. However, Voltronic Power is 1.51 times more volatile than Liton Technology. It trades about 0.03 of its potential returns per unit of risk. Liton Technology is currently generating about 0.03 per unit of risk. If you would invest  150,500  in Voltronic Power Technology on September 21, 2024 and sell it today you would earn a total of  37,500  from holding Voltronic Power Technology or generate 24.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.79%
Values	Daily Returns

Voltronic Power Technology  vs.  Liton Technology

Voltronic Power Tech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Voltronic Power Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Liton Technology

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Liton Technology are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Liton Technology 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 Voltronic Power and Liton Technology

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

The idea behind Voltronic Power Technology and Liton 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.