Correlation Between Lindeman Asia and EyeGene
Can any of the company-specific risk be diversified away by investing in both Lindeman Asia and EyeGene 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 EyeGene 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 EyeGene, you can compare the effects of market volatilities on Lindeman Asia and EyeGene 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 EyeGene. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lindeman Asia and EyeGene.
Diversification Opportunities for Lindeman Asia and EyeGene
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lindeman and EyeGene is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Lindeman Asia Investment and EyeGene in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EyeGene 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 EyeGene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EyeGene has no effect on the direction of Lindeman Asia i.e., Lindeman Asia and EyeGene go up and down completely randomly.
Pair Corralation between Lindeman Asia and EyeGene
Assuming the 90 days trading horizon Lindeman Asia Investment is expected to under-perform the EyeGene. In addition to that, Lindeman Asia is 1.04 times more volatile than EyeGene. It trades about -0.19 of its total potential returns per unit of risk. EyeGene is currently generating about -0.12 per unit of volatility. If you would invest 344,000 in EyeGene on September 2, 2024 and sell it today you would lose (61,500) from holding EyeGene or give up 17.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lindeman Asia Investment vs. EyeGene
Performance |
| Timeline |
| Lindeman Asia Investment |
| EyeGene |
Lindeman Asia and EyeGene Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lindeman Asia and EyeGene
The main advantage of trading using opposite Lindeman Asia and EyeGene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lindeman Asia position performs unexpectedly, EyeGene 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 EyeGene will offset losses from the drop in EyeGene's long position.| Lindeman Asia vs. Solution Advanced Technology | Lindeman Asia vs. Busan Industrial Co | Lindeman Asia vs. Busan Ind | Lindeman Asia vs. Mirae Asset Daewoo |
| EyeGene vs. CJ Seafood Corp | EyeGene vs. Chorokbaem Healthcare Co | EyeGene vs. Shinsegae Food | EyeGene vs. InnoTherapy |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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