Correlation Between Aju IB and Lindeman Asia
Can any of the company-specific risk be diversified away by investing in both Aju IB and Lindeman Asia 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 Aju IB and Lindeman Asia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aju IB Investment and Lindeman Asia Investment, you can compare the effects of market volatilities on Aju IB and Lindeman Asia 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 Aju IB with a short position of Lindeman Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aju IB and Lindeman Asia.
Diversification Opportunities for Aju IB and Lindeman Asia
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aju and Lindeman is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Aju IB Investment and Lindeman Asia Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lindeman Asia Investment and Aju IB 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 Aju IB Investment are associated (or correlated) with Lindeman Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lindeman Asia Investment has no effect on the direction of Aju IB i.e., Aju IB and Lindeman Asia go up and down completely randomly.
Pair Corralation between Aju IB and Lindeman Asia
Assuming the 90 days trading horizon Aju IB Investment is expected to generate 2.86 times more return on investment than Lindeman Asia. However, Aju IB is 2.86 times more volatile than Lindeman Asia Investment. It trades about 0.19 of its potential returns per unit of risk. Lindeman Asia Investment is currently generating about -0.14 per unit of risk. If you would invest 201,500 in Aju IB Investment on August 31, 2024 and sell it today you would earn a total of 79,500 from holding Aju IB Investment or generate 39.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aju IB Investment vs. Lindeman Asia Investment
Performance |
| Timeline |
| Aju IB Investment |
| Lindeman Asia Investment |
Aju IB and Lindeman Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aju IB and Lindeman Asia
The main advantage of trading using opposite Aju IB and Lindeman Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aju IB position performs unexpectedly, Lindeman Asia 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 Lindeman Asia will offset losses from the drop in Lindeman Asia's long position.| Aju IB vs. Atinum Investment Co | Aju IB vs. SBI Investment KOREA | Aju IB vs. Daesung Private Equity | Aju IB vs. Solution Advanced Technology |
| Lindeman Asia vs. Atinum Investment Co | Lindeman Asia vs. SBI Investment KOREA | Lindeman Asia vs. Daesung Private Equity | Lindeman Asia vs. Solution Advanced Technology |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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