Correlation Between FarmStory and LX Semicon
Can any of the company-specific risk be diversified away by investing in both FarmStory 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 FarmStory and LX Semicon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FarmStory Co and LX Semicon Co, you can compare the effects of market volatilities on FarmStory 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 FarmStory with a short position of LX Semicon. Check out your portfolio center. Please also check ongoing floating volatility patterns of FarmStory and LX Semicon.
Diversification Opportunities for FarmStory and LX Semicon
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between FarmStory and 108320 is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding FarmStory Co and LX Semicon Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LX Semicon and FarmStory 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 FarmStory Co 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 FarmStory i.e., FarmStory and LX Semicon go up and down completely randomly.
Pair Corralation between FarmStory and LX Semicon
Assuming the 90 days trading horizon FarmStory Co is expected to generate 1.09 times more return on investment than LX Semicon. However, FarmStory is 1.09 times more volatile than LX Semicon Co. It trades about -0.3 of its potential returns per unit of risk. LX Semicon Co is currently generating about -0.35 per unit of risk. If you would invest 130,400 in FarmStory Co on September 1, 2024 and sell it today you would lose (14,400) from holding FarmStory Co or give up 11.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
FarmStory Co vs. LX Semicon Co
Performance |
| Timeline |
| FarmStory |
| LX Semicon |
FarmStory and LX Semicon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FarmStory and LX Semicon
The main advantage of trading using opposite FarmStory and LX Semicon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FarmStory 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.| FarmStory vs. Korea Real Estate | FarmStory vs. Korea Ratings Co | FarmStory vs. IQuest Co | FarmStory vs. Wonbang Tech 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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