Correlation Between Lindeman Asia and Daol Investment
Can any of the company-specific risk be diversified away by investing in both Lindeman Asia and Daol 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 Lindeman Asia and Daol Investment 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 Daol Investment Securities, you can compare the effects of market volatilities on Lindeman Asia and Daol 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 Lindeman Asia with a short position of Daol Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lindeman Asia and Daol Investment.
Diversification Opportunities for Lindeman Asia and Daol Investment
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lindeman and Daol is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Lindeman Asia Investment and Daol Investment Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daol Investment Secu 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 Daol Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daol Investment Secu has no effect on the direction of Lindeman Asia i.e., Lindeman Asia and Daol Investment go up and down completely randomly.
Pair Corralation between Lindeman Asia and Daol Investment
Assuming the 90 days trading horizon Lindeman Asia Investment is expected to under-perform the Daol Investment. In addition to that, Lindeman Asia is 2.21 times more volatile than Daol Investment Securities. It trades about -0.14 of its total potential returns per unit of risk. Daol Investment Securities is currently generating about -0.17 per unit of volatility. If you would invest 283,000 in Daol Investment Securities on August 29, 2024 and sell it today you would lose (16,000) from holding Daol Investment Securities or give up 5.65% 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. Daol Investment Securities
Performance |
| Timeline |
| Lindeman Asia Investment |
| Daol Investment Secu |
Lindeman Asia and Daol Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lindeman Asia and Daol Investment
The main advantage of trading using opposite Lindeman Asia and Daol Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lindeman Asia position performs unexpectedly, Daol 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 Daol Investment will offset losses from the drop in Daol Investment's long position.| Lindeman Asia vs. HB Technology TD | Lindeman Asia vs. Daou Technology | Lindeman Asia vs. Orbitech Co | Lindeman Asia vs. POSCO M TECH Co |
| Daol Investment vs. Samsung Electronics Co | Daol Investment vs. Samsung Electronics Co | Daol Investment vs. LG Energy Solution | Daol 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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