Correlation Between LEENO Industrial and Phoenix Materials
Can any of the company-specific risk be diversified away by investing in both LEENO Industrial and Phoenix Materials 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 Phoenix Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LEENO Industrial and Phoenix Materials Co, you can compare the effects of market volatilities on LEENO Industrial and Phoenix Materials 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 Phoenix Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of LEENO Industrial and Phoenix Materials.
Diversification Opportunities for LEENO Industrial and Phoenix Materials
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between LEENO and Phoenix is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding LEENO Industrial and Phoenix Materials Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phoenix Materials 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 Phoenix Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phoenix Materials has no effect on the direction of LEENO Industrial i.e., LEENO Industrial and Phoenix Materials go up and down completely randomly.
Pair Corralation between LEENO Industrial and Phoenix Materials
Assuming the 90 days trading horizon LEENO Industrial is expected to generate 0.66 times more return on investment than Phoenix Materials. However, LEENO Industrial is 1.51 times less risky than Phoenix Materials. It trades about 0.02 of its potential returns per unit of risk. Phoenix Materials Co is currently generating about -0.02 per unit of risk. If you would invest 16,568,600 in LEENO Industrial on October 17, 2024 and sell it today you would earn a total of 2,621,400 from holding LEENO Industrial or generate 15.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 96.07% |
| Values | Daily Returns |
LEENO Industrial vs. Phoenix Materials Co
Performance |
| Timeline |
| LEENO Industrial |
| Phoenix Materials |
LEENO Industrial and Phoenix Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LEENO Industrial and Phoenix Materials
The main advantage of trading using opposite LEENO Industrial and Phoenix Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LEENO Industrial position performs unexpectedly, Phoenix Materials 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 Phoenix Materials will offset losses from the drop in Phoenix Materials' long position.| LEENO Industrial vs. Tokai Carbon Korea | LEENO Industrial vs. LF Co | LEENO Industrial vs. Koh Young Technology |
| Phoenix Materials vs. Myoung Shin Industrial | Phoenix Materials vs. PJ Metal Co | Phoenix Materials vs. LEENO Industrial | Phoenix Materials vs. Daesung Industrial 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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