Correlation Between Andes Technology and Luo Lih

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

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

Diversification Opportunities for Andes Technology and Luo Lih

0.0

Correlation Coefficient

Andes Technology  Luo Lih

Pay attention - limited upside

The 3 months correlation between Andes and Luo is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Andes Technology Corp and Luo Lih Fen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Luo Lih Fen and Andes Technology 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 Andes Technology Corp are associated (or correlated) with Luo Lih. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Luo Lih Fen has no effect on the direction of Andes Technology i.e., Andes Technology and Luo Lih go up and down completely randomly.

Pair Corralation between Andes Technology and Luo Lih

If you would invest (100.00) in Luo Lih Fen on February 2, 2024 and sell it today you would earn a total of  100.00  from holding Luo Lih Fen or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Andes Technology Corp  vs.  Luo Lih Fen

Andes Technology Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Andes Technology Corp 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 June 2024. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Luo Lih Fen

Risk-Adjusted Performance

0 of 100

Insignificant

Over the last 90 days Luo Lih Fen has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Luo Lih is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Andes Technology and Luo Lih

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

The idea behind Andes Technology Corp and Luo Lih Fen 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..