Correlation Between ANJI Technology and Ligitek Electronics

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

By analyzing existing cross correlation between ANJI Technology Co and Ligitek Electronics Co, you can compare the effects of market volatilities on ANJI Technology and Ligitek Electronics 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 ANJI Technology with a short position of Ligitek Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANJI Technology and Ligitek Electronics.

Diversification Opportunities for ANJI Technology and Ligitek Electronics

-0.05

Correlation Coefficient

ANJI Technology  Ligitek Electronics

Good diversification

The 3 months correlation between ANJI and Ligitek is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding ANJI Technology Co and Ligitek Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ligitek Electronics and ANJI 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 ANJI Technology Co are associated (or correlated) with Ligitek Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ligitek Electronics has no effect on the direction of ANJI Technology i.e., ANJI Technology and Ligitek Electronics go up and down completely randomly.

Pair Corralation between ANJI Technology and Ligitek Electronics

Assuming the 90 days trading horizon ANJI Technology Co is expected to under-perform the Ligitek Electronics. But the stock apears to be less risky and, when comparing its historical volatility, ANJI Technology Co is 2.02 times less risky than Ligitek Electronics. The stock trades about -0.05 of its potential returns per unit of risk. The Ligitek Electronics Co is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  2,790  in Ligitek Electronics Co on September 12, 2024 and sell it today you would earn a total of  1,675  from holding Ligitek Electronics Co or generate 60.04% return on investment over 90 days.

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

ANJI Technology Co  vs.  Ligitek Electronics Co

ANJI Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ANJI Technology Co 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.

Ligitek Electronics

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ligitek Electronics Co are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Ligitek Electronics showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ANJI Technology and Ligitek Electronics

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

The idea behind ANJI Technology Co and Ligitek Electronics Co 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.