Correlation Between Laster Tech and Transcend Information
Can any of the company-specific risk be diversified away by investing in both Laster Tech and Transcend Information 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 Laster Tech and Transcend Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Laster Tech Corp and Transcend Information, you can compare the effects of market volatilities on Laster Tech and Transcend Information 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 Laster Tech with a short position of Transcend Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Laster Tech and Transcend Information.
Diversification Opportunities for Laster Tech and Transcend Information
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Laster and Transcend is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Laster Tech Corp and Transcend Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transcend Information and Laster Tech 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 Laster Tech Corp are associated (or correlated) with Transcend Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transcend Information has no effect on the direction of Laster Tech i.e., Laster Tech and Transcend Information go up and down completely randomly.
Pair Corralation between Laster Tech and Transcend Information
Assuming the 90 days trading horizon Laster Tech Corp is expected to under-perform the Transcend Information. In addition to that, Laster Tech is 1.25 times more volatile than Transcend Information. It trades about -0.35 of its total potential returns per unit of risk. Transcend Information is currently generating about 0.08 per unit of volatility. If you would invest 9,260 in Transcend Information on February 4, 2024 and sell it today you would earn a total of 190.00 from holding Transcend Information or generate 2.05% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Laster Tech Corp vs. Transcend Information
Performance |
Timeline |
Laster Tech Corp |
Transcend Information |
Laster Tech and Transcend Information Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Laster Tech and Transcend Information
The main advantage of trading using opposite Laster Tech and Transcend Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Laster Tech position performs unexpectedly, Transcend Information 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 Transcend Information will offset losses from the drop in Transcend Information's long position.Laster Tech vs. Taiwan Semiconductor Manufacturing | Laster Tech vs. MediaTek | Laster Tech vs. United Microelectronics | Laster Tech vs. Novatek Microelectronics Corp |
Transcend Information vs. Nanya Technology Corp | Transcend Information vs. Powertech Technology | Transcend Information vs. Chicony Electronics Co | Transcend Information vs. Realtek Semiconductor 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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