Correlation Between Lion Chemtech and Nature
Can any of the company-specific risk be diversified away by investing in both Lion Chemtech and Nature 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 Lion Chemtech and Nature into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lion Chemtech Co and Nature and Environment, you can compare the effects of market volatilities on Lion Chemtech and Nature 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 Lion Chemtech with a short position of Nature. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion Chemtech and Nature.
Diversification Opportunities for Lion Chemtech and Nature
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lion and Nature is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Lion Chemtech Co and Nature and Environment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nature and Environment and Lion Chemtech 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 Lion Chemtech Co are associated (or correlated) with Nature. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nature and Environment has no effect on the direction of Lion Chemtech i.e., Lion Chemtech and Nature go up and down completely randomly.
Pair Corralation between Lion Chemtech and Nature
Assuming the 90 days trading horizon Lion Chemtech Co is expected to generate 1.05 times more return on investment than Nature. However, Lion Chemtech is 1.05 times more volatile than Nature and Environment. It trades about -0.02 of its potential returns per unit of risk. Nature and Environment is currently generating about -0.03 per unit of risk. If you would invest 399,869 in Lion Chemtech Co on August 25, 2024 and sell it today you would lose (152,869) from holding Lion Chemtech Co or give up 38.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lion Chemtech Co vs. Nature and Environment
Performance |
| Timeline |
| Lion Chemtech |
| Nature and Environment |
Lion Chemtech and Nature Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion Chemtech and Nature
The main advantage of trading using opposite Lion Chemtech and Nature positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion Chemtech position performs unexpectedly, Nature 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 Nature will offset losses from the drop in Nature's long position.| Lion Chemtech vs. Nature and Environment | Lion Chemtech vs. Cheryong Industrial CoLtd | Lion Chemtech vs. IL Science Co |
| Nature vs. Cube Entertainment | Nature vs. Derkwoo Electronics Co | Nature vs. MediaZen | Nature vs. Sungwoo Electronics 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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