Correlation Between SS TECH and LEENO Industrial
Can any of the company-specific risk be diversified away by investing in both SS TECH and LEENO Industrial 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 SS TECH and LEENO Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SS TECH and LEENO Industrial, you can compare the effects of market volatilities on SS TECH and LEENO Industrial 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 SS TECH with a short position of LEENO Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of SS TECH and LEENO Industrial.
Diversification Opportunities for SS TECH and LEENO Industrial
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between 101490 and LEENO is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding SS TECH and LEENO Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LEENO Industrial and SS TECH 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 SS TECH are associated (or correlated) with LEENO Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LEENO Industrial has no effect on the direction of SS TECH i.e., SS TECH and LEENO Industrial go up and down completely randomly.
Pair Corralation between SS TECH and LEENO Industrial
Assuming the 90 days trading horizon SS TECH is expected to under-perform the LEENO Industrial. In addition to that, SS TECH is 1.07 times more volatile than LEENO Industrial. It trades about -0.05 of its total potential returns per unit of risk. LEENO Industrial is currently generating about 0.02 per unit of volatility. If you would invest 14,768,500 in LEENO Industrial on August 29, 2024 and sell it today you would earn a total of 951,500 from holding LEENO Industrial or generate 6.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SS TECH vs. LEENO Industrial
Performance |
| Timeline |
| SS TECH |
| LEENO Industrial |
SS TECH and LEENO Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SS TECH and LEENO Industrial
The main advantage of trading using opposite SS TECH and LEENO Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SS TECH position performs unexpectedly, LEENO Industrial 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 LEENO Industrial will offset losses from the drop in LEENO Industrial's long position.| SS TECH vs. Daou Data Corp | SS TECH vs. Busan Industrial Co | SS TECH vs. Busan Ind | SS TECH vs. Shinhan WTI Futures |
| LEENO Industrial vs. Daou Data Corp | LEENO Industrial vs. Busan Industrial Co | LEENO Industrial vs. Busan Ind | LEENO Industrial vs. Shinhan WTI Futures |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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