Correlation Between Lindeman Asia and ECSTELECOM
Can any of the company-specific risk be diversified away by investing in both Lindeman Asia and ECSTELECOM 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 ECSTELECOM 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 ECSTELECOM Co, you can compare the effects of market volatilities on Lindeman Asia and ECSTELECOM 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 ECSTELECOM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lindeman Asia and ECSTELECOM.
Diversification Opportunities for Lindeman Asia and ECSTELECOM
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Lindeman and ECSTELECOM is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Lindeman Asia Investment and ECSTELECOM Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ECSTELECOM 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 ECSTELECOM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ECSTELECOM has no effect on the direction of Lindeman Asia i.e., Lindeman Asia and ECSTELECOM go up and down completely randomly.
Pair Corralation between Lindeman Asia and ECSTELECOM
Assuming the 90 days trading horizon Lindeman Asia Investment is expected to under-perform the ECSTELECOM. In addition to that, Lindeman Asia is 2.86 times more volatile than ECSTELECOM Co. It trades about -0.15 of its total potential returns per unit of risk. ECSTELECOM Co is currently generating about -0.26 per unit of volatility. If you would invest 306,000 in ECSTELECOM Co on September 5, 2024 and sell it today you would lose (21,500) from holding ECSTELECOM Co or give up 7.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lindeman Asia Investment vs. ECSTELECOM Co
Performance |
| Timeline |
| Lindeman Asia Investment |
| ECSTELECOM |
Lindeman Asia and ECSTELECOM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lindeman Asia and ECSTELECOM
The main advantage of trading using opposite Lindeman Asia and ECSTELECOM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lindeman Asia position performs unexpectedly, ECSTELECOM 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 ECSTELECOM will offset losses from the drop in ECSTELECOM's long position.| Lindeman Asia vs. MetaLabs Co | Lindeman Asia vs. Hyundai Industrial Co | Lindeman Asia vs. Kbi Metal Co | Lindeman Asia vs. Dongil Technology |
| ECSTELECOM vs. Busan Industrial Co | ECSTELECOM vs. UNISEM Co | ECSTELECOM vs. RPBio Inc | ECSTELECOM vs. Finebesteel |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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