Correlation Between LARGAN Precision and New Era

Can any of the company-specific risk be diversified away by investing in both LARGAN Precision and New Era 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 LARGAN Precision and New Era into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for LARGAN Precision and New Era

0.0

Correlation Coefficient

LARGAN Precision  New Era

Pay attention - limited upside

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

Pair Corralation between LARGAN Precision and New Era

If you would invest  0.00  in New Era Electronics on February 4, 2024 and sell it today you would earn a total of  0.00  from holding New Era Electronics or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	5.26%
Values	Daily Returns

LARGAN Precision Co  vs.  New Era Electronics

LARGAN Precision

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LARGAN Precision 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.

New Era Electronics

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in New Era Electronics are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, New Era showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with LARGAN Precision and New Era

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

The idea behind LARGAN Precision Co and New Era Electronics 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.