Correlation Between Kyeryong Construction and LB Investment
Can any of the company-specific risk be diversified away by investing in both Kyeryong Construction and LB Investment 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 Kyeryong Construction and LB Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kyeryong Construction Industrial and LB Investment, you can compare the effects of market volatilities on Kyeryong Construction and LB Investment 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 Kyeryong Construction with a short position of LB Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kyeryong Construction and LB Investment.
Diversification Opportunities for Kyeryong Construction and LB Investment
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kyeryong and 309960 is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Kyeryong Construction Industri and LB Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LB Investment and Kyeryong Construction 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 Kyeryong Construction Industrial are associated (or correlated) with LB Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LB Investment has no effect on the direction of Kyeryong Construction i.e., Kyeryong Construction and LB Investment go up and down completely randomly.
Pair Corralation between Kyeryong Construction and LB Investment
Assuming the 90 days trading horizon Kyeryong Construction Industrial is expected to generate 0.44 times more return on investment than LB Investment. However, Kyeryong Construction Industrial is 2.27 times less risky than LB Investment. It trades about -0.05 of its potential returns per unit of risk. LB Investment is currently generating about -0.05 per unit of risk. If you would invest 1,877,269 in Kyeryong Construction Industrial on November 7, 2024 and sell it today you would lose (662,269) from holding Kyeryong Construction Industrial or give up 35.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.14% |
| Values | Daily Returns |
Kyeryong Construction Industri vs. LB Investment
Performance |
| Timeline |
| Kyeryong Construction |
| LB Investment |
Kyeryong Construction and LB Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kyeryong Construction and LB Investment
The main advantage of trading using opposite Kyeryong Construction and LB Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kyeryong Construction position performs unexpectedly, LB Investment 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 LB Investment will offset losses from the drop in LB Investment's long position.| Kyeryong Construction vs. AptaBio Therapeutics | Kyeryong Construction vs. Daewoo SBI SPAC | Kyeryong Construction vs. Dream Security co | Kyeryong Construction vs. Microfriend |
| LB Investment vs. Samsung Electronics Co | LB Investment vs. Samsung Electronics Co | LB Investment vs. LG Energy Solution | LB Investment vs. SK Hynix |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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