Correlation Between LockLock and Stic Investments
Can any of the company-specific risk be diversified away by investing in both LockLock and Stic Investments 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 LockLock and Stic Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LockLock Co and Stic Investments, you can compare the effects of market volatilities on LockLock and Stic Investments 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 LockLock with a short position of Stic Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of LockLock and Stic Investments.
Diversification Opportunities for LockLock and Stic Investments
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between LockLock and Stic is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding LockLock Co and Stic Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stic Investments and LockLock 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 LockLock Co are associated (or correlated) with Stic Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stic Investments has no effect on the direction of LockLock i.e., LockLock and Stic Investments go up and down completely randomly.
Pair Corralation between LockLock and Stic Investments
Assuming the 90 days trading horizon LockLock Co is expected to under-perform the Stic Investments. But the stock apears to be less risky and, when comparing its historical volatility, LockLock Co is 12.99 times less risky than Stic Investments. The stock trades about -0.04 of its potential returns per unit of risk. The Stic Investments is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 794,000 in Stic Investments on September 12, 2024 and sell it today you would earn a total of 92,000 from holding Stic Investments or generate 11.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.31% |
| Values | Daily Returns |
LockLock Co vs. Stic Investments
Performance |
| Timeline |
| LockLock |
| Stic Investments |
LockLock and Stic Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LockLock and Stic Investments
The main advantage of trading using opposite LockLock and Stic Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LockLock position performs unexpectedly, Stic Investments 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 Stic Investments will offset losses from the drop in Stic Investments' long position.| LockLock vs. LG Chemicals | LockLock vs. POSCO Holdings | LockLock vs. Hanwha Solutions | LockLock vs. Lotte Chemical Corp |
| Stic Investments vs. Cube Entertainment | Stic Investments vs. Dreamus Company | Stic Investments vs. LG Energy Solution | Stic Investments vs. Dongwon System |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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