Correlation Between Lion Chemtech and Eagle Veterinary
Can any of the company-specific risk be diversified away by investing in both Lion Chemtech and Eagle Veterinary 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 Eagle Veterinary 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 Eagle Veterinary Technology, you can compare the effects of market volatilities on Lion Chemtech and Eagle Veterinary 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 Eagle Veterinary. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion Chemtech and Eagle Veterinary.
Diversification Opportunities for Lion Chemtech and Eagle Veterinary
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lion and Eagle is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Lion Chemtech Co and Eagle Veterinary Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Veterinary Tec 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 Eagle Veterinary. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Veterinary Tec has no effect on the direction of Lion Chemtech i.e., Lion Chemtech and Eagle Veterinary go up and down completely randomly.
Pair Corralation between Lion Chemtech and Eagle Veterinary
Assuming the 90 days trading horizon Lion Chemtech Co is expected to under-perform the Eagle Veterinary. In addition to that, Lion Chemtech is 1.24 times more volatile than Eagle Veterinary Technology. It trades about -0.05 of its total potential returns per unit of risk. Eagle Veterinary Technology is currently generating about -0.03 per unit of volatility. If you would invest 552,000 in Eagle Veterinary Technology on August 25, 2024 and sell it today you would lose (73,500) from holding Eagle Veterinary Technology or give up 13.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lion Chemtech Co vs. Eagle Veterinary Technology
Performance |
| Timeline |
| Lion Chemtech |
| Eagle Veterinary Tec |
Lion Chemtech and Eagle Veterinary Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion Chemtech and Eagle Veterinary
The main advantage of trading using opposite Lion Chemtech and Eagle Veterinary positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion Chemtech position performs unexpectedly, Eagle Veterinary 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 Eagle Veterinary will offset losses from the drop in Eagle Veterinary's long position.| Lion Chemtech vs. Nature and Environment | Lion Chemtech vs. Cheryong Industrial CoLtd | Lion Chemtech vs. IL Science Co |
| Eagle Veterinary vs. Kolon Life Science | Eagle Veterinary vs. Aminologics CoLtd | Eagle Veterinary vs. Daihan Pharmaceutical CoLtd | Eagle Veterinary vs. Withuspharmaceutical CoLtd |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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