Correlation Between Voltronic Power and Leatec Fine

Can any of the company-specific risk be diversified away by investing in both Voltronic Power and Leatec Fine 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 Leatec Fine 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 Leatec Fine Ceramics, you can compare the effects of market volatilities on Voltronic Power and Leatec Fine 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 Leatec Fine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voltronic Power and Leatec Fine.

Diversification Opportunities for Voltronic Power and Leatec Fine

0.0

Correlation Coefficient

Voltronic Power  Leatec Fine

Pay attention - limited upside

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

Pair Corralation between Voltronic Power and Leatec Fine

Assuming the 90 days trading horizon Voltronic Power Technology is expected to under-perform the Leatec Fine. In addition to that, Voltronic Power is 1.15 times more volatile than Leatec Fine Ceramics. It trades about -0.3 of its total potential returns per unit of risk. Leatec Fine Ceramics is currently generating about 0.08 per unit of volatility. If you would invest  2,805  in Leatec Fine Ceramics on September 5, 2024 and sell it today you would earn a total of  75.00  from holding Leatec Fine Ceramics or generate 2.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	78.26%
Values	Daily Returns

Voltronic Power Technology  vs.  Leatec Fine Ceramics

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 latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Leatec Fine Ceramics

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Leatec Fine Ceramics are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Leatec Fine showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Voltronic Power and Leatec Fine

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

The idea behind Voltronic Power Technology and Leatec Fine Ceramics 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.