Correlation Between LEENO Industrial and Dongjin Semichem
Can any of the company-specific risk be diversified away by investing in both LEENO Industrial and Dongjin Semichem 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 LEENO Industrial and Dongjin Semichem into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LEENO Industrial and Dongjin Semichem Co, you can compare the effects of market volatilities on LEENO Industrial and Dongjin Semichem 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 LEENO Industrial with a short position of Dongjin Semichem. Check out your portfolio center. Please also check ongoing floating volatility patterns of LEENO Industrial and Dongjin Semichem.
Diversification Opportunities for LEENO Industrial and Dongjin Semichem
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between LEENO and Dongjin is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding LEENO Industrial and Dongjin Semichem Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongjin Semichem and LEENO Industrial 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 LEENO Industrial are associated (or correlated) with Dongjin Semichem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongjin Semichem has no effect on the direction of LEENO Industrial i.e., LEENO Industrial and Dongjin Semichem go up and down completely randomly.
Pair Corralation between LEENO Industrial and Dongjin Semichem
Assuming the 90 days trading horizon LEENO Industrial is expected to generate 0.86 times more return on investment than Dongjin Semichem. However, LEENO Industrial is 1.17 times less risky than Dongjin Semichem. It trades about -0.15 of its potential returns per unit of risk. Dongjin Semichem Co is currently generating about -0.16 per unit of risk. If you would invest 18,030,000 in LEENO Industrial on August 29, 2024 and sell it today you would lose (1,920,000) from holding LEENO Industrial or give up 10.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
LEENO Industrial vs. Dongjin Semichem Co
Performance |
| Timeline |
| LEENO Industrial |
| Dongjin Semichem |
LEENO Industrial and Dongjin Semichem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LEENO Industrial and Dongjin Semichem
The main advantage of trading using opposite LEENO Industrial and Dongjin Semichem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LEENO Industrial position performs unexpectedly, Dongjin Semichem 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 Dongjin Semichem will offset losses from the drop in Dongjin Semichem's long position.| LEENO Industrial vs. Daou Data Corp | LEENO Industrial vs. Busan Industrial Co | LEENO Industrial vs. Busan Ind | LEENO Industrial vs. Shinhan WTI Futures |
| Dongjin Semichem vs. Wonik Ips Co | Dongjin Semichem vs. Nepes | Dongjin Semichem vs. LEENO Industrial | Dongjin Semichem vs. LF Co |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |