Correlation Between Lantronix and Ebang International

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

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

Diversification Opportunities for Lantronix and Ebang International

0.51

Correlation Coefficient

Lantronix  Ebang International

Very weak diversification

The 3 months correlation between Lantronix and Ebang is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Lantronix and Ebang International Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ebang International and Lantronix 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 Lantronix are associated (or correlated) with Ebang International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ebang International has no effect on the direction of Lantronix i.e., Lantronix and Ebang International go up and down completely randomly.

Pair Corralation between Lantronix and Ebang International

Given the investment horizon of 90 days Lantronix is expected to generate 1.24 times more return on investment than Ebang International. However, Lantronix is 1.24 times more volatile than Ebang International Holdings. It trades about -0.09 of its potential returns per unit of risk. Ebang International Holdings is currently generating about -0.16 per unit of risk. If you would invest  377.00  in Lantronix on December 21, 2024 and sell it today you would lose (106.00) from holding Lantronix or give up 28.12% of portfolio value over 90 days.

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

Lantronix  vs.  Ebang International Holdings

Lantronix

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lantronix has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Ebang International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ebang International Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Lantronix and Ebang International

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

The idea behind Lantronix and Ebang International Holdings 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.