Correlation Between LabGenomics and SH Energy
Can any of the company-specific risk be diversified away by investing in both LabGenomics and SH Energy 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 LabGenomics and SH Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LabGenomics Co and SH Energy Chemical, you can compare the effects of market volatilities on LabGenomics and SH Energy 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 LabGenomics with a short position of SH Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of LabGenomics and SH Energy.
Diversification Opportunities for LabGenomics and SH Energy
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between LabGenomics and 002360 is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding LabGenomics Co and SH Energy Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SH Energy Chemical and LabGenomics 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 LabGenomics Co are associated (or correlated) with SH Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SH Energy Chemical has no effect on the direction of LabGenomics i.e., LabGenomics and SH Energy go up and down completely randomly.
Pair Corralation between LabGenomics and SH Energy
Assuming the 90 days trading horizon LabGenomics Co is expected to generate 1.71 times more return on investment than SH Energy. However, LabGenomics is 1.71 times more volatile than SH Energy Chemical. It trades about 0.01 of its potential returns per unit of risk. SH Energy Chemical is currently generating about -0.03 per unit of risk. If you would invest 304,638 in LabGenomics Co on September 4, 2024 and sell it today you would lose (49,638) from holding LabGenomics Co or give up 16.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LabGenomics Co vs. SH Energy Chemical
Performance |
| Timeline |
| LabGenomics |
| SH Energy Chemical |
LabGenomics and SH Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LabGenomics and SH Energy
The main advantage of trading using opposite LabGenomics and SH Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LabGenomics position performs unexpectedly, SH Energy 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 SH Energy will offset losses from the drop in SH Energy's long position.| LabGenomics vs. Seoul Broadcasting System | LabGenomics vs. Korea Alcohol Industrial | LabGenomics vs. Samsung Life Insurance | LabGenomics vs. Hanjin Transportation Co |
| SH Energy vs. Samyung Trading Co | SH Energy vs. Shinsegae Information Communication | SH Energy vs. System and Application | SH Energy vs. TS Investment Corp |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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