Correlation Between LEENO Industrial and Insung Information
Can any of the company-specific risk be diversified away by investing in both LEENO Industrial and Insung Information 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 Insung Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LEENO Industrial and Insung Information Co, you can compare the effects of market volatilities on LEENO Industrial and Insung Information 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 Insung Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of LEENO Industrial and Insung Information.
Diversification Opportunities for LEENO Industrial and Insung Information
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between LEENO and Insung is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding LEENO Industrial and Insung Information Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insung Information 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 Insung Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insung Information has no effect on the direction of LEENO Industrial i.e., LEENO Industrial and Insung Information go up and down completely randomly.
Pair Corralation between LEENO Industrial and Insung Information
Assuming the 90 days trading horizon LEENO Industrial is expected to generate 0.64 times more return on investment than Insung Information. However, LEENO Industrial is 1.57 times less risky than Insung Information. It trades about 0.01 of its potential returns per unit of risk. Insung Information Co is currently generating about -0.01 per unit of risk. If you would invest 15,734,000 in LEENO Industrial on September 12, 2024 and sell it today you would lose (154,000) from holding LEENO Industrial or give up 0.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LEENO Industrial vs. Insung Information Co
Performance |
| Timeline |
| LEENO Industrial |
| Insung Information |
LEENO Industrial and Insung Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LEENO Industrial and Insung Information
The main advantage of trading using opposite LEENO Industrial and Insung Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LEENO Industrial position performs unexpectedly, Insung Information 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 Insung Information will offset losses from the drop in Insung Information's long position.| LEENO Industrial vs. Cube Entertainment | LEENO Industrial vs. Dreamus Company | LEENO Industrial vs. LG Energy Solution | LEENO Industrial vs. Dongwon System |
| Insung Information vs. Pungguk Ethanol Industrial | Insung Information vs. Haesung Industrial Co | Insung Information vs. Cheryong Industrial CoLtd | Insung Information vs. LEENO Industrial |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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