Correlation Between LEENO Industrial and Seoam Machinery
Can any of the company-specific risk be diversified away by investing in both LEENO Industrial and Seoam Machinery 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 Seoam Machinery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LEENO Industrial and Seoam Machinery Industry, you can compare the effects of market volatilities on LEENO Industrial and Seoam Machinery 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 Seoam Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of LEENO Industrial and Seoam Machinery.
Diversification Opportunities for LEENO Industrial and Seoam Machinery
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between LEENO and Seoam is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding LEENO Industrial and Seoam Machinery Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seoam Machinery Industry 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 Seoam Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seoam Machinery Industry has no effect on the direction of LEENO Industrial i.e., LEENO Industrial and Seoam Machinery go up and down completely randomly.
Pair Corralation between LEENO Industrial and Seoam Machinery
Assuming the 90 days trading horizon LEENO Industrial is expected to generate 0.99 times more return on investment than Seoam Machinery. However, LEENO Industrial is 1.01 times less risky than Seoam Machinery. It trades about 0.04 of its potential returns per unit of risk. Seoam Machinery Industry is currently generating about -0.05 per unit of risk. If you would invest 19,741,400 in LEENO Industrial on October 26, 2024 and sell it today you would earn a total of 1,708,600 from holding LEENO Industrial or generate 8.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LEENO Industrial vs. Seoam Machinery Industry
Performance |
| Timeline |
| LEENO Industrial |
| Seoam Machinery Industry |
LEENO Industrial and Seoam Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LEENO Industrial and Seoam Machinery
The main advantage of trading using opposite LEENO Industrial and Seoam Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LEENO Industrial position performs unexpectedly, Seoam Machinery 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 Seoam Machinery will offset losses from the drop in Seoam Machinery's long position.| LEENO Industrial vs. Tokai Carbon Korea | LEENO Industrial vs. LF Co | LEENO Industrial vs. Koh Young Technology |
| Seoam Machinery vs. LEENO Industrial | Seoam Machinery vs. DRB Industrial Co | Seoam Machinery vs. Guyoung Technology Co | Seoam Machinery vs. Automobile Pc |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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