Correlation Between LX Semicon and Tokai Carbon
Can any of the company-specific risk be diversified away by investing in both LX Semicon and Tokai Carbon 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 LX Semicon and Tokai Carbon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LX Semicon Co and Tokai Carbon Korea, you can compare the effects of market volatilities on LX Semicon and Tokai Carbon 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 LX Semicon with a short position of Tokai Carbon. Check out your portfolio center. Please also check ongoing floating volatility patterns of LX Semicon and Tokai Carbon.
Diversification Opportunities for LX Semicon and Tokai Carbon
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 108320 and Tokai is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding LX Semicon Co and Tokai Carbon Korea in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tokai Carbon Korea and LX Semicon 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 LX Semicon Co are associated (or correlated) with Tokai Carbon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tokai Carbon Korea has no effect on the direction of LX Semicon i.e., LX Semicon and Tokai Carbon go up and down completely randomly.
Pair Corralation between LX Semicon and Tokai Carbon
Assuming the 90 days trading horizon LX Semicon is expected to generate 1.25 times less return on investment than Tokai Carbon. In addition to that, LX Semicon is 1.06 times more volatile than Tokai Carbon Korea. It trades about 0.17 of its total potential returns per unit of risk. Tokai Carbon Korea is currently generating about 0.23 per unit of volatility. If you would invest 6,850,514 in Tokai Carbon Korea on October 25, 2024 and sell it today you would earn a total of 549,486 from holding Tokai Carbon Korea or generate 8.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LX Semicon Co vs. Tokai Carbon Korea
Performance |
| Timeline |
| LX Semicon |
| Tokai Carbon Korea |
LX Semicon and Tokai Carbon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LX Semicon and Tokai Carbon
The main advantage of trading using opposite LX Semicon and Tokai Carbon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LX Semicon position performs unexpectedly, Tokai Carbon 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 Tokai Carbon will offset losses from the drop in Tokai Carbon's long position.| LX Semicon vs. Daishin Information Communications | LX Semicon vs. Lotte Data Communication | LX Semicon vs. LG Household Healthcare | LX Semicon vs. EBEST Investment Securities |
| Tokai Carbon vs. LEENO Industrial | Tokai Carbon vs. Wonik Ips Co | Tokai Carbon vs. Dongjin Semichem Co | Tokai Carbon vs. Hana Materials |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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