Correlation Between Lindeman Asia and ASTORY CoLtd
Can any of the company-specific risk be diversified away by investing in both Lindeman Asia and ASTORY CoLtd 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 ASTORY CoLtd 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 ASTORY CoLtd, you can compare the effects of market volatilities on Lindeman Asia and ASTORY CoLtd 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 ASTORY CoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lindeman Asia and ASTORY CoLtd.
Diversification Opportunities for Lindeman Asia and ASTORY CoLtd
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Lindeman and ASTORY is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Lindeman Asia Investment and ASTORY CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASTORY CoLtd 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 ASTORY CoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASTORY CoLtd has no effect on the direction of Lindeman Asia i.e., Lindeman Asia and ASTORY CoLtd go up and down completely randomly.
Pair Corralation between Lindeman Asia and ASTORY CoLtd
Assuming the 90 days trading horizon Lindeman Asia Investment is expected to under-perform the ASTORY CoLtd. In addition to that, Lindeman Asia is 1.14 times more volatile than ASTORY CoLtd. It trades about -0.15 of its total potential returns per unit of risk. ASTORY CoLtd is currently generating about -0.07 per unit of volatility. If you would invest 1,098,000 in ASTORY CoLtd on September 3, 2024 and sell it today you would lose (302,000) from holding ASTORY CoLtd or give up 27.5% 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. ASTORY CoLtd
Performance |
| Timeline |
| Lindeman Asia Investment |
| ASTORY CoLtd |
Lindeman Asia and ASTORY CoLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lindeman Asia and ASTORY CoLtd
The main advantage of trading using opposite Lindeman Asia and ASTORY CoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lindeman Asia position performs unexpectedly, ASTORY CoLtd 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 ASTORY CoLtd will offset losses from the drop in ASTORY CoLtd'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 |
| ASTORY CoLtd vs. System and Application | ASTORY CoLtd vs. Ssangyong Information Communication | ASTORY CoLtd vs. Kakao Games Corp | ASTORY CoLtd vs. Polaris Office Corp |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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