Correlation Between Lee Ku and INFINITT Healthcare
Can any of the company-specific risk be diversified away by investing in both Lee Ku and INFINITT Healthcare 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 Lee Ku and INFINITT Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lee Ku Industrial and INFINITT Healthcare Co, you can compare the effects of market volatilities on Lee Ku and INFINITT Healthcare 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 Lee Ku with a short position of INFINITT Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lee Ku and INFINITT Healthcare.
Diversification Opportunities for Lee Ku and INFINITT Healthcare
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Lee and INFINITT is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Lee Ku Industrial and INFINITT Healthcare Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INFINITT Healthcare and Lee Ku 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 Lee Ku Industrial are associated (or correlated) with INFINITT Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INFINITT Healthcare has no effect on the direction of Lee Ku i.e., Lee Ku and INFINITT Healthcare go up and down completely randomly.
Pair Corralation between Lee Ku and INFINITT Healthcare
Assuming the 90 days trading horizon Lee Ku Industrial is expected to generate 1.95 times more return on investment than INFINITT Healthcare. However, Lee Ku is 1.95 times more volatile than INFINITT Healthcare Co. It trades about 0.14 of its potential returns per unit of risk. INFINITT Healthcare Co is currently generating about -0.23 per unit of risk. If you would invest 415,000 in Lee Ku Industrial on October 17, 2024 and sell it today you would earn a total of 19,000 from holding Lee Ku Industrial or generate 4.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lee Ku Industrial vs. INFINITT Healthcare Co
Performance |
| Timeline |
| Lee Ku Industrial |
| INFINITT Healthcare |
Lee Ku and INFINITT Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lee Ku and INFINITT Healthcare
The main advantage of trading using opposite Lee Ku and INFINITT Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lee Ku position performs unexpectedly, INFINITT Healthcare 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 INFINITT Healthcare will offset losses from the drop in INFINITT Healthcare's long position.| Lee Ku vs. Haitai Confectionery Foods | Lee Ku vs. Orbitech Co | Lee Ku vs. KMH Hitech Co | Lee Ku vs. Samyang Foods Co |
| INFINITT Healthcare vs. Myoung Shin Industrial | INFINITT Healthcare vs. Korean Drug Co | INFINITT Healthcare vs. Eagon Industrial Co | INFINITT Healthcare vs. Lee Ku Industrial |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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