Correlation Between Leadtek Research and Sun Max

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Leadtek Research and Sun Max 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 Leadtek Research and Sun Max into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leadtek Research and Sun Max Tech, you can compare the effects of market volatilities on Leadtek Research and Sun Max 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 Leadtek Research with a short position of Sun Max. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leadtek Research and Sun Max.

Diversification Opportunities for Leadtek Research and Sun Max

-0.52
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Leadtek and Sun is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Leadtek Research and Sun Max Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sun Max Tech and Leadtek Research 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 Leadtek Research are associated (or correlated) with Sun Max. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sun Max Tech has no effect on the direction of Leadtek Research i.e., Leadtek Research and Sun Max go up and down completely randomly.

Pair Corralation between Leadtek Research and Sun Max

Assuming the 90 days trading horizon Leadtek Research is expected to generate 1.9 times more return on investment than Sun Max. However, Leadtek Research is 1.9 times more volatile than Sun Max Tech. It trades about 0.04 of its potential returns per unit of risk. Sun Max Tech is currently generating about 0.04 per unit of risk. If you would invest  6,670  in Leadtek Research on September 6, 2024 and sell it today you would earn a total of  1,530  from holding Leadtek Research or generate 22.94% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Leadtek Research  vs.  Sun Max Tech

 Performance 
       Timeline  
Leadtek Research 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Leadtek Research has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Leadtek Research is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.
Sun Max Tech 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Sun Max Tech are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Sun Max showed solid returns over the last few months and may actually be approaching a breakup point.

Leadtek Research and Sun Max Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Leadtek Research and Sun Max

The main advantage of trading using opposite Leadtek Research and Sun Max positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leadtek Research position performs unexpectedly, Sun Max 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 Sun Max will offset losses from the drop in Sun Max's long position.
The idea behind Leadtek Research and Sun Max Tech 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.
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..

Other Complementary Tools

Price Exposure Probability
Analyze equity upside and downside potential for a given time horizon across multiple markets
Sync Your Broker
Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors.
Idea Breakdown
Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes
Theme Ratings
Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance
Money Managers
Screen money managers from public funds and ETFs managed around the world