Correlation Between LEENO Industrial and COWELL FASHION
Can any of the company-specific risk be diversified away by investing in both LEENO Industrial and COWELL FASHION 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 COWELL FASHION into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LEENO Industrial and COWELL FASHION CoLtd, you can compare the effects of market volatilities on LEENO Industrial and COWELL FASHION 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 COWELL FASHION. Check out your portfolio center. Please also check ongoing floating volatility patterns of LEENO Industrial and COWELL FASHION.
Diversification Opportunities for LEENO Industrial and COWELL FASHION
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between LEENO and COWELL is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding LEENO Industrial and COWELL FASHION CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COWELL FASHION CoLtd 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 COWELL FASHION. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COWELL FASHION CoLtd has no effect on the direction of LEENO Industrial i.e., LEENO Industrial and COWELL FASHION go up and down completely randomly.
Pair Corralation between LEENO Industrial and COWELL FASHION
Assuming the 90 days trading horizon LEENO Industrial is expected to under-perform the COWELL FASHION. But the stock apears to be less risky and, when comparing its historical volatility, LEENO Industrial is 1.11 times less risky than COWELL FASHION. The stock trades about -0.13 of its potential returns per unit of risk. The COWELL FASHION CoLtd is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 291,000 in COWELL FASHION CoLtd on September 3, 2024 and sell it today you would lose (96,500) from holding COWELL FASHION CoLtd or give up 33.16% 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. COWELL FASHION CoLtd
Performance |
| Timeline |
| LEENO Industrial |
| COWELL FASHION CoLtd |
LEENO Industrial and COWELL FASHION Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LEENO Industrial and COWELL FASHION
The main advantage of trading using opposite LEENO Industrial and COWELL FASHION positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LEENO Industrial position performs unexpectedly, COWELL FASHION 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 COWELL FASHION will offset losses from the drop in COWELL FASHION's long position.| LEENO Industrial vs. Dongsin Engineering Construction | LEENO Industrial vs. Doosan Fuel Cell | LEENO Industrial vs. Daishin Balance 1 | LEENO Industrial vs. Total Soft Bank |
| COWELL FASHION vs. AfreecaTV Co | COWELL FASHION vs. Nice Information Telecommunication | COWELL FASHION vs. Posco ICT | COWELL FASHION 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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