Correlation Between DSC Investment and Lindeman Asia
Can any of the company-specific risk be diversified away by investing in both DSC Investment and Lindeman Asia 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 DSC Investment and Lindeman Asia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DSC Investment and Lindeman Asia Investment, you can compare the effects of market volatilities on DSC Investment and Lindeman Asia 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 DSC Investment with a short position of Lindeman Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of DSC Investment and Lindeman Asia.
Diversification Opportunities for DSC Investment and Lindeman Asia
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DSC and Lindeman is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding DSC Investment and Lindeman Asia Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lindeman Asia Investment and DSC Investment 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 DSC Investment are associated (or correlated) with Lindeman Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lindeman Asia Investment has no effect on the direction of DSC Investment i.e., DSC Investment and Lindeman Asia go up and down completely randomly.
Pair Corralation between DSC Investment and Lindeman Asia
Assuming the 90 days trading horizon DSC Investment is expected to under-perform the Lindeman Asia. But the stock apears to be less risky and, when comparing its historical volatility, DSC Investment is 2.62 times less risky than Lindeman Asia. The stock trades about -0.01 of its potential returns per unit of risk. The Lindeman Asia Investment is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 341,000 in Lindeman Asia Investment on November 3, 2024 and sell it today you would earn a total of 66,000 from holding Lindeman Asia Investment or generate 19.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.37% |
| Values | Daily Returns |
DSC Investment vs. Lindeman Asia Investment
Performance |
| Timeline |
| DSC Investment |
| Lindeman Asia Investment |
DSC Investment and Lindeman Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DSC Investment and Lindeman Asia
The main advantage of trading using opposite DSC Investment and Lindeman Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DSC Investment position performs unexpectedly, Lindeman Asia 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 Lindeman Asia will offset losses from the drop in Lindeman Asia's long position.| DSC Investment vs. CG Hi Tech | DSC Investment vs. Dongwoon Anatech Co | DSC Investment vs. Orbitech Co | DSC Investment vs. Raontech |
| Lindeman Asia vs. Cloud Air CoLtd | Lindeman Asia vs. KEPCO Engineering Construction | Lindeman Asia vs. Dongbang Ship Machinery | Lindeman Asia vs. Hankook Furniture 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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