Correlation Between Vissem Electronics and LS Materials
Can any of the company-specific risk be diversified away by investing in both Vissem Electronics and LS 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 Vissem Electronics and LS Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vissem Electronics Co and LS Materials, you can compare the effects of market volatilities on Vissem Electronics and LS 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 Vissem Electronics with a short position of LS Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vissem Electronics and LS Materials.
Diversification Opportunities for Vissem Electronics and LS Materials
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Vissem and 417200 is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Vissem Electronics Co and LS Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LS Materials and Vissem Electronics 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 Vissem Electronics Co are associated (or correlated) with LS Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LS Materials has no effect on the direction of Vissem Electronics i.e., Vissem Electronics and LS Materials go up and down completely randomly.
Pair Corralation between Vissem Electronics and LS Materials
Assuming the 90 days trading horizon Vissem Electronics Co is expected to generate 0.7 times more return on investment than LS Materials. However, Vissem Electronics Co is 1.44 times less risky than LS Materials. It trades about -0.06 of its potential returns per unit of risk. LS Materials is currently generating about -0.07 per unit of risk. If you would invest 560,000 in Vissem Electronics Co on October 27, 2024 and sell it today you would lose (198,500) from holding Vissem Electronics Co or give up 35.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vissem Electronics Co vs. LS Materials
Performance |
| Timeline |
| Vissem Electronics |
| LS Materials |
Vissem Electronics and LS Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vissem Electronics and LS Materials
The main advantage of trading using opposite Vissem Electronics and LS Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vissem Electronics position performs unexpectedly, LS 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 LS Materials will offset losses from the drop in LS Materials' long position.| Vissem Electronics vs. Koryo Credit Information | Vissem Electronics vs. Dongbang Transport Logistics | Vissem Electronics vs. Taegu Broadcasting | Vissem Electronics vs. Daishin Information Communications |
| LS Materials vs. Dongkuk Structures Construction | LS Materials vs. Dongwoo Farm To | LS Materials vs. Jeju Bank | LS Materials vs. Settlebank |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |