Correlation Between LX Semicon and ITM Semiconductor
Can any of the company-specific risk be diversified away by investing in both LX Semicon and ITM Semiconductor 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 ITM Semiconductor 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 ITM Semiconductor Co, you can compare the effects of market volatilities on LX Semicon and ITM Semiconductor 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 ITM Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of LX Semicon and ITM Semiconductor.
Diversification Opportunities for LX Semicon and ITM Semiconductor
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 108320 and ITM is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding LX Semicon Co and ITM Semiconductor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ITM Semiconductor 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 ITM Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ITM Semiconductor has no effect on the direction of LX Semicon i.e., LX Semicon and ITM Semiconductor go up and down completely randomly.
Pair Corralation between LX Semicon and ITM Semiconductor
Assuming the 90 days trading horizon LX Semicon Co is expected to generate 0.7 times more return on investment than ITM Semiconductor. However, LX Semicon Co is 1.43 times less risky than ITM Semiconductor. It trades about -0.03 of its potential returns per unit of risk. ITM Semiconductor Co is currently generating about -0.03 per unit of risk. If you would invest 9,612,308 in LX Semicon Co on November 27, 2024 and sell it today you would lose (3,112,308) from holding LX Semicon Co or give up 32.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LX Semicon Co vs. ITM Semiconductor Co
Performance |
| Timeline |
| LX Semicon |
| ITM Semiconductor |
LX Semicon and ITM Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LX Semicon and ITM Semiconductor
The main advantage of trading using opposite LX Semicon and ITM Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LX Semicon position performs unexpectedly, ITM Semiconductor 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 ITM Semiconductor will offset losses from the drop in ITM Semiconductor's long position.| LX Semicon vs. CKH Food Health | LX Semicon vs. LG Household Healthcare | LX Semicon vs. Sam Yang Foods | LX Semicon vs. Alton Sports CoLtd |
| ITM Semiconductor vs. Samyang Foods Co | ITM Semiconductor vs. Hankook Furniture Co | ITM Semiconductor vs. Jahwa Electronics Co | ITM Semiconductor vs. Samsung Publishing 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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