Correlation Between Daesung Private and Lindeman Asia
Can any of the company-specific risk be diversified away by investing in both Daesung Private 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 Daesung Private and Lindeman Asia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daesung Private Equity and Lindeman Asia Investment, you can compare the effects of market volatilities on Daesung Private 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 Daesung Private with a short position of Lindeman Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daesung Private and Lindeman Asia.
Diversification Opportunities for Daesung Private and Lindeman Asia
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Daesung and Lindeman is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Daesung Private Equity 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 Daesung Private 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 Daesung Private Equity 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 Daesung Private i.e., Daesung Private and Lindeman Asia go up and down completely randomly.
Pair Corralation between Daesung Private and Lindeman Asia
Assuming the 90 days trading horizon Daesung Private Equity is expected to under-perform the Lindeman Asia. But the stock apears to be less risky and, when comparing its historical volatility, Daesung Private Equity is 3.14 times less risky than Lindeman Asia. The stock trades about -0.02 of its potential returns per unit of risk. The Lindeman Asia Investment is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 407,000 in Lindeman Asia Investment on November 29, 2024 and sell it today you would earn a total of 74,000 from holding Lindeman Asia Investment or generate 18.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daesung Private Equity vs. Lindeman Asia Investment
Performance |
| Timeline |
| Daesung Private Equity |
| Lindeman Asia Investment |
Daesung Private and Lindeman Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daesung Private and Lindeman Asia
The main advantage of trading using opposite Daesung Private and Lindeman Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daesung Private 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.| Daesung Private vs. Kukil Metal Co | Daesung Private vs. Heungkuk Metaltech CoLtd | Daesung Private vs. Shinhan Inverse Copper | Daesung Private vs. ITM Semiconductor Co |
| Lindeman Asia vs. Daishin Information Communications | Lindeman Asia vs. InfoBank | Lindeman Asia vs. Jeju Bank | Lindeman Asia vs. BNK Financial Group |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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