Correlation Between LEENO Industrial and Hansol Homedeco
Can any of the company-specific risk be diversified away by investing in both LEENO Industrial and Hansol Homedeco 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 Hansol Homedeco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LEENO Industrial and Hansol Homedeco Co, you can compare the effects of market volatilities on LEENO Industrial and Hansol Homedeco 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 Hansol Homedeco. Check out your portfolio center. Please also check ongoing floating volatility patterns of LEENO Industrial and Hansol Homedeco.
Diversification Opportunities for LEENO Industrial and Hansol Homedeco
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between LEENO and Hansol is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding LEENO Industrial and Hansol Homedeco Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hansol Homedeco 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 Hansol Homedeco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hansol Homedeco has no effect on the direction of LEENO Industrial i.e., LEENO Industrial and Hansol Homedeco go up and down completely randomly.
Pair Corralation between LEENO Industrial and Hansol Homedeco
Assuming the 90 days trading horizon LEENO Industrial is expected to generate 2.09 times more return on investment than Hansol Homedeco. However, LEENO Industrial is 2.09 times more volatile than Hansol Homedeco Co. It trades about 0.03 of its potential returns per unit of risk. Hansol Homedeco Co is currently generating about -0.06 per unit of risk. If you would invest 15,320,200 in LEENO Industrial on September 19, 2024 and sell it today you would earn a total of 4,099,800 from holding LEENO Industrial or generate 26.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
LEENO Industrial vs. Hansol Homedeco Co
Performance |
| Timeline |
| LEENO Industrial |
| Hansol Homedeco |
LEENO Industrial and Hansol Homedeco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LEENO Industrial and Hansol Homedeco
The main advantage of trading using opposite LEENO Industrial and Hansol Homedeco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LEENO Industrial position performs unexpectedly, Hansol Homedeco 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 Hansol Homedeco will offset losses from the drop in Hansol Homedeco's long position.| LEENO Industrial vs. Cube Entertainment | LEENO Industrial vs. Dreamus Company | LEENO Industrial vs. LG Energy Solution | LEENO Industrial vs. Dongwon System |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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