Correlation Between Kyung Chang and LX Semicon
Can any of the company-specific risk be diversified away by investing in both Kyung Chang and LX Semicon 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 Kyung Chang and LX Semicon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kyung Chang Industrial and LX Semicon Co, you can compare the effects of market volatilities on Kyung Chang and LX Semicon 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 Kyung Chang with a short position of LX Semicon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kyung Chang and LX Semicon.
Diversification Opportunities for Kyung Chang and LX Semicon
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kyung and 108320 is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Kyung Chang Industrial and LX Semicon Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LX Semicon and Kyung Chang 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 Kyung Chang Industrial are associated (or correlated) with LX Semicon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LX Semicon has no effect on the direction of Kyung Chang i.e., Kyung Chang and LX Semicon go up and down completely randomly.
Pair Corralation between Kyung Chang and LX Semicon
Assuming the 90 days trading horizon Kyung Chang Industrial is expected to generate 1.42 times more return on investment than LX Semicon. However, Kyung Chang is 1.42 times more volatile than LX Semicon Co. It trades about -0.04 of its potential returns per unit of risk. LX Semicon Co is currently generating about -0.07 per unit of risk. If you would invest 260,000 in Kyung Chang Industrial on September 1, 2024 and sell it today you would lose (60,000) from holding Kyung Chang Industrial or give up 23.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.19% |
| Values | Daily Returns |
Kyung Chang Industrial vs. LX Semicon Co
Performance |
| Timeline |
| Kyung Chang Industrial |
| LX Semicon |
Kyung Chang and LX Semicon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kyung Chang and LX Semicon
The main advantage of trading using opposite Kyung Chang and LX Semicon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kyung Chang position performs unexpectedly, LX Semicon 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 LX Semicon will offset losses from the drop in LX Semicon's long position.| Kyung Chang vs. FNC Entertainment Co | Kyung Chang vs. Samick Musical Instruments | Kyung Chang vs. Tamul Multimedia Co | Kyung Chang vs. Daedong Metals Co |
| LX Semicon vs. Dongsin Engineering Construction | LX Semicon vs. Doosan Fuel Cell | LX Semicon vs. Daishin Balance 1 | LX Semicon vs. Total Soft Bank |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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