Correlation Between Lindeman Asia and Kyeryong Construction
Can any of the company-specific risk be diversified away by investing in both Lindeman Asia and Kyeryong Construction 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 Lindeman Asia and Kyeryong Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lindeman Asia Investment and Kyeryong Construction Industrial, you can compare the effects of market volatilities on Lindeman Asia and Kyeryong Construction 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 Lindeman Asia with a short position of Kyeryong Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lindeman Asia and Kyeryong Construction.
Diversification Opportunities for Lindeman Asia and Kyeryong Construction
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lindeman and Kyeryong is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Lindeman Asia Investment and Kyeryong Construction Industri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kyeryong Construction and Lindeman Asia 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 Lindeman Asia Investment are associated (or correlated) with Kyeryong Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kyeryong Construction has no effect on the direction of Lindeman Asia i.e., Lindeman Asia and Kyeryong Construction go up and down completely randomly.
Pair Corralation between Lindeman Asia and Kyeryong Construction
Assuming the 90 days trading horizon Lindeman Asia Investment is expected to under-perform the Kyeryong Construction. In addition to that, Lindeman Asia is 3.32 times more volatile than Kyeryong Construction Industrial. It trades about -0.16 of its total potential returns per unit of risk. Kyeryong Construction Industrial is currently generating about -0.05 per unit of volatility. If you would invest 1,324,000 in Kyeryong Construction Industrial on September 3, 2024 and sell it today you would lose (16,000) from holding Kyeryong Construction Industrial or give up 1.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lindeman Asia Investment vs. Kyeryong Construction Industri
Performance |
| Timeline |
| Lindeman Asia Investment |
| Kyeryong Construction |
Lindeman Asia and Kyeryong Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lindeman Asia and Kyeryong Construction
The main advantage of trading using opposite Lindeman Asia and Kyeryong Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lindeman Asia position performs unexpectedly, Kyeryong Construction 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 Kyeryong Construction will offset losses from the drop in Kyeryong Construction's long position.| Lindeman Asia vs. Nh Investment And | Lindeman Asia vs. Hanwha InvestmentSecurities Co | Lindeman Asia vs. Samsung Special Purpose | Lindeman Asia vs. YeSUN Tech CoLtd |
| Kyeryong Construction vs. AptaBio Therapeutics | Kyeryong Construction vs. Daewoo SBI SPAC | Kyeryong Construction vs. Dream Security co | Kyeryong Construction vs. Microfriend |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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