Correlation Between MEDIPOST and Lee Ku
Can any of the company-specific risk be diversified away by investing in both MEDIPOST and Lee Ku 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 MEDIPOST and Lee Ku into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MEDIPOST Co and Lee Ku Industrial, you can compare the effects of market volatilities on MEDIPOST and Lee Ku 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 MEDIPOST with a short position of Lee Ku. Check out your portfolio center. Please also check ongoing floating volatility patterns of MEDIPOST and Lee Ku.
Diversification Opportunities for MEDIPOST and Lee Ku
Excellent diversification
The 3 months correlation between MEDIPOST and Lee is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding MEDIPOST Co and Lee Ku Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lee Ku Industrial and MEDIPOST 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 MEDIPOST Co are associated (or correlated) with Lee Ku. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lee Ku Industrial has no effect on the direction of MEDIPOST i.e., MEDIPOST and Lee Ku go up and down completely randomly.
Pair Corralation between MEDIPOST and Lee Ku
Assuming the 90 days trading horizon MEDIPOST Co is expected to under-perform the Lee Ku. In addition to that, MEDIPOST is 3.29 times more volatile than Lee Ku Industrial. It trades about -0.24 of its total potential returns per unit of risk. Lee Ku Industrial is currently generating about 0.13 per unit of volatility. If you would invest 415,000 in Lee Ku Industrial on October 17, 2024 and sell it today you would earn a total of 18,500 from holding Lee Ku Industrial or generate 4.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MEDIPOST Co vs. Lee Ku Industrial
Performance |
| Timeline |
| MEDIPOST |
| Lee Ku Industrial |
MEDIPOST and Lee Ku Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MEDIPOST and Lee Ku
The main advantage of trading using opposite MEDIPOST and Lee Ku positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MEDIPOST position performs unexpectedly, Lee Ku 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 Lee Ku will offset losses from the drop in Lee Ku's long position.| MEDIPOST vs. Korean Drug Co | MEDIPOST vs. Sewoon Medical Co | MEDIPOST vs. Hanmi Semiconductor Co | MEDIPOST vs. Seers Technology |
| Lee Ku vs. Haitai Confectionery Foods | Lee Ku vs. Orbitech Co | Lee Ku vs. KMH Hitech Co | Lee Ku vs. Samyang Foods 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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