Correlation Between LegoChem Biosciences and Samlip General
Can any of the company-specific risk be diversified away by investing in both LegoChem Biosciences and Samlip General 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 LegoChem Biosciences and Samlip General into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LegoChem Biosciences and Samlip General Foods, you can compare the effects of market volatilities on LegoChem Biosciences and Samlip General 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 LegoChem Biosciences with a short position of Samlip General. Check out your portfolio center. Please also check ongoing floating volatility patterns of LegoChem Biosciences and Samlip General.
Diversification Opportunities for LegoChem Biosciences and Samlip General
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between LegoChem and Samlip is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding LegoChem Biosciences and Samlip General Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samlip General Foods and LegoChem Biosciences 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 LegoChem Biosciences are associated (or correlated) with Samlip General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samlip General Foods has no effect on the direction of LegoChem Biosciences i.e., LegoChem Biosciences and Samlip General go up and down completely randomly.
Pair Corralation between LegoChem Biosciences and Samlip General
Assuming the 90 days trading horizon LegoChem Biosciences is expected to under-perform the Samlip General. In addition to that, LegoChem Biosciences is 2.82 times more volatile than Samlip General Foods. It trades about -0.08 of its total potential returns per unit of risk. Samlip General Foods is currently generating about 0.25 per unit of volatility. If you would invest 4,420,000 in Samlip General Foods on September 14, 2024 and sell it today you would earn a total of 395,000 from holding Samlip General Foods or generate 8.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LegoChem Biosciences vs. Samlip General Foods
Performance |
| Timeline |
| LegoChem Biosciences |
| Samlip General Foods |
LegoChem Biosciences and Samlip General Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LegoChem Biosciences and Samlip General
The main advantage of trading using opposite LegoChem Biosciences and Samlip General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LegoChem Biosciences position performs unexpectedly, Samlip General 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 Samlip General will offset losses from the drop in Samlip General's long position.| LegoChem Biosciences vs. Jeong Moon Information | LegoChem Biosciences vs. Ssangyong Information Communication | LegoChem Biosciences vs. Sungchang Autotech Co | LegoChem Biosciences vs. Moadata Co |
| Samlip General vs. KakaoBank Corp | Samlip General vs. Atinum Investment Co | Samlip General vs. Lotte Non Life Insurance | Samlip General vs. Incar Financial Service |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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