Correlation Between Incar Financial and LB Investment
Can any of the company-specific risk be diversified away by investing in both Incar Financial and LB Investment 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 Incar Financial and LB Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Incar Financial Service and LB Investment, you can compare the effects of market volatilities on Incar Financial and LB Investment 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 Incar Financial with a short position of LB Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Incar Financial and LB Investment.
Diversification Opportunities for Incar Financial and LB Investment
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Incar and 309960 is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Incar Financial Service and LB Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LB Investment and Incar Financial 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 Incar Financial Service are associated (or correlated) with LB Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LB Investment has no effect on the direction of Incar Financial i.e., Incar Financial and LB Investment go up and down completely randomly.
Pair Corralation between Incar Financial and LB Investment
Assuming the 90 days trading horizon Incar Financial Service is expected to generate 1.33 times more return on investment than LB Investment. However, Incar Financial is 1.33 times more volatile than LB Investment. It trades about 0.07 of its potential returns per unit of risk. LB Investment is currently generating about -0.15 per unit of risk. If you would invest 529,276 in Incar Financial Service on November 7, 2024 and sell it today you would earn a total of 55,724 from holding Incar Financial Service or generate 10.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Incar Financial Service vs. LB Investment
Performance |
| Timeline |
| Incar Financial Service |
| LB Investment |
Incar Financial and LB Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Incar Financial and LB Investment
The main advantage of trading using opposite Incar Financial and LB Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Incar Financial position performs unexpectedly, LB Investment 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 LB Investment will offset losses from the drop in LB Investment's long position.| Incar Financial vs. Clean Science co | Incar Financial vs. Kukil Metal Co | Incar Financial vs. Nh Investment And | Incar Financial vs. Woori Technology Investment |
| LB Investment vs. Samsung Electronics Co | LB Investment vs. Samsung Electronics Co | LB Investment vs. LG Energy Solution | LB Investment vs. SK Hynix |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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