Correlation Between LEENO Industrial and CU Medical
Can any of the company-specific risk be diversified away by investing in both LEENO Industrial and CU Medical 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 CU Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LEENO Industrial and CU Medical Systems, you can compare the effects of market volatilities on LEENO Industrial and CU Medical 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 CU Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of LEENO Industrial and CU Medical.
Diversification Opportunities for LEENO Industrial and CU Medical
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between LEENO and 115480 is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding LEENO Industrial and CU Medical Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CU Medical Systems 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 CU Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CU Medical Systems has no effect on the direction of LEENO Industrial i.e., LEENO Industrial and CU Medical go up and down completely randomly.
Pair Corralation between LEENO Industrial and CU Medical
Assuming the 90 days trading horizon LEENO Industrial is expected to generate 1.27 times more return on investment than CU Medical. However, LEENO Industrial is 1.27 times more volatile than CU Medical Systems. It trades about 0.39 of its potential returns per unit of risk. CU Medical Systems is currently generating about 0.09 per unit of risk. If you would invest 15,140,000 in LEENO Industrial on September 19, 2024 and sell it today you would earn a total of 3,730,000 from holding LEENO Industrial or generate 24.64% 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. CU Medical Systems
Performance |
| Timeline |
| LEENO Industrial |
| CU Medical Systems |
LEENO Industrial and CU Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LEENO Industrial and CU Medical
The main advantage of trading using opposite LEENO Industrial and CU Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LEENO Industrial position performs unexpectedly, CU Medical 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 CU Medical will offset losses from the drop in CU Medical's long position.| LEENO Industrial vs. Cube Entertainment | LEENO Industrial vs. Dreamus Company | LEENO Industrial vs. LG Energy Solution | LEENO Industrial vs. Dongwon System |
| CU Medical vs. Samsung Electronics Co | CU Medical vs. Samsung Electronics Co | CU Medical vs. SK Hynix | CU Medical vs. SK Holdings 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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