Correlation Between EBEST Investment and LX Semicon
Can any of the company-specific risk be diversified away by investing in both EBEST Investment and LX Semicon 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 EBEST Investment and LX Semicon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EBEST Investment Securities and LX Semicon Co, you can compare the effects of market volatilities on EBEST Investment and LX Semicon 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 EBEST Investment with a short position of LX Semicon. Check out your portfolio center. Please also check ongoing floating volatility patterns of EBEST Investment and LX Semicon.
Diversification Opportunities for EBEST Investment and LX Semicon
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between EBEST and 108320 is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding EBEST Investment Securities and LX Semicon Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LX Semicon and EBEST Investment 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 EBEST Investment Securities are associated (or correlated) with LX Semicon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LX Semicon has no effect on the direction of EBEST Investment i.e., EBEST Investment and LX Semicon go up and down completely randomly.
Pair Corralation between EBEST Investment and LX Semicon
Assuming the 90 days trading horizon EBEST Investment Securities is expected to under-perform the LX Semicon. But the stock apears to be less risky and, when comparing its historical volatility, EBEST Investment Securities is 1.26 times less risky than LX Semicon. The stock trades about -0.05 of its potential returns per unit of risk. The LX Semicon Co is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 5,780,000 in LX Semicon Co on October 25, 2024 and sell it today you would earn a total of 500,000 from holding LX Semicon Co or generate 8.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
EBEST Investment Securities vs. LX Semicon Co
Performance |
| Timeline |
| EBEST Investment Sec |
| LX Semicon |
EBEST Investment and LX Semicon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EBEST Investment and LX Semicon
The main advantage of trading using opposite EBEST Investment and LX Semicon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EBEST Investment position performs unexpectedly, LX Semicon 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 LX Semicon will offset losses from the drop in LX Semicon's long position.| EBEST Investment vs. Hyundai Home Shopping | EBEST Investment vs. Daiyang Metal Co | EBEST Investment vs. Kukil Metal Co | EBEST Investment vs. Duksan Hi Metal |
| LX Semicon vs. Daishin Information Communications | LX Semicon vs. Lotte Data Communication | LX Semicon vs. LG Household Healthcare | LX Semicon vs. EBEST Investment Securities |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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