Correlation Between Lion Chemtech and Alton Sports
Can any of the company-specific risk be diversified away by investing in both Lion Chemtech and Alton Sports 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 Alton Sports 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 Alton Sports CoLtd, you can compare the effects of market volatilities on Lion Chemtech and Alton Sports 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 Alton Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion Chemtech and Alton Sports.
Diversification Opportunities for Lion Chemtech and Alton Sports
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lion and Alton is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Lion Chemtech Co and Alton Sports CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alton Sports CoLtd 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 Alton Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alton Sports CoLtd has no effect on the direction of Lion Chemtech i.e., Lion Chemtech and Alton Sports go up and down completely randomly.
Pair Corralation between Lion Chemtech and Alton Sports
Assuming the 90 days trading horizon Lion Chemtech Co is expected to generate 3.04 times more return on investment than Alton Sports. However, Lion Chemtech is 3.04 times more volatile than Alton Sports CoLtd. It trades about 0.08 of its potential returns per unit of risk. Alton Sports CoLtd is currently generating about -0.15 per unit of risk. If you would invest 218,000 in Lion Chemtech Co on August 29, 2024 and sell it today you would earn a total of 25,500 from holding Lion Chemtech Co or generate 11.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.31% |
| Values | Daily Returns |
Lion Chemtech Co vs. Alton Sports CoLtd
Performance |
| Timeline |
| Lion Chemtech |
| Alton Sports CoLtd |
Lion Chemtech and Alton Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion Chemtech and Alton Sports
The main advantage of trading using opposite Lion Chemtech and Alton Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion Chemtech position performs unexpectedly, Alton Sports 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 Alton Sports will offset losses from the drop in Alton Sports' long position.| Lion Chemtech vs. CJ Seafood Corp | Lion Chemtech vs. Korea Information Communications | Lion Chemtech vs. Samlip General Foods | Lion Chemtech vs. CKH Food Health |
| Alton Sports vs. Nable Communications | Alton Sports vs. Cuckoo Electronics Co | Alton Sports vs. Daesung Hi Tech Co | Alton Sports vs. Daishin Information Communications |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |