Correlation Between LEENO Industrial and Lion Chemtech
Can any of the company-specific risk be diversified away by investing in both LEENO Industrial and Lion Chemtech 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 Lion Chemtech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LEENO Industrial and Lion Chemtech Co, you can compare the effects of market volatilities on LEENO Industrial and Lion Chemtech 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 Lion Chemtech. Check out your portfolio center. Please also check ongoing floating volatility patterns of LEENO Industrial and Lion Chemtech.
Diversification Opportunities for LEENO Industrial and Lion Chemtech
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between LEENO and Lion is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding LEENO Industrial and Lion Chemtech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lion Chemtech 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 Lion Chemtech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lion Chemtech has no effect on the direction of LEENO Industrial i.e., LEENO Industrial and Lion Chemtech go up and down completely randomly.
Pair Corralation between LEENO Industrial and Lion Chemtech
Assuming the 90 days trading horizon LEENO Industrial is expected to generate 0.91 times more return on investment than Lion Chemtech. However, LEENO Industrial is 1.1 times less risky than Lion Chemtech. It trades about 0.03 of its potential returns per unit of risk. Lion Chemtech Co is currently generating about 0.0 per unit of risk. If you would invest 16,607,400 in LEENO Industrial on October 30, 2024 and sell it today you would earn a total of 4,942,600 from holding LEENO Industrial or generate 29.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LEENO Industrial vs. Lion Chemtech Co
Performance |
| Timeline |
| LEENO Industrial |
| Lion Chemtech |
LEENO Industrial and Lion Chemtech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LEENO Industrial and Lion Chemtech
The main advantage of trading using opposite LEENO Industrial and Lion Chemtech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LEENO Industrial position performs unexpectedly, Lion Chemtech 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 Lion Chemtech will offset losses from the drop in Lion Chemtech's long position.| LEENO Industrial vs. Tokai Carbon Korea | LEENO Industrial vs. LF Co | LEENO Industrial vs. Koh Young Technology |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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