Correlation Between Lindeman Asia and YOUNGHWA TECH
Can any of the company-specific risk be diversified away by investing in both Lindeman Asia and YOUNGHWA TECH 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 YOUNGHWA TECH 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 YOUNGHWA TECH Co, you can compare the effects of market volatilities on Lindeman Asia and YOUNGHWA TECH 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 YOUNGHWA TECH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lindeman Asia and YOUNGHWA TECH.
Diversification Opportunities for Lindeman Asia and YOUNGHWA TECH
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lindeman and YOUNGHWA is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Lindeman Asia Investment and YOUNGHWA TECH Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YOUNGHWA TECH 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 YOUNGHWA TECH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YOUNGHWA TECH has no effect on the direction of Lindeman Asia i.e., Lindeman Asia and YOUNGHWA TECH go up and down completely randomly.
Pair Corralation between Lindeman Asia and YOUNGHWA TECH
Assuming the 90 days trading horizon Lindeman Asia Investment is expected to under-perform the YOUNGHWA TECH. In addition to that, Lindeman Asia is 1.95 times more volatile than YOUNGHWA TECH Co. It trades about -0.03 of its total potential returns per unit of risk. YOUNGHWA TECH Co is currently generating about -0.04 per unit of volatility. If you would invest 1,106,602 in YOUNGHWA TECH Co on August 31, 2024 and sell it today you would lose (359,602) from holding YOUNGHWA TECH Co or give up 32.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lindeman Asia Investment vs. YOUNGHWA TECH Co
Performance |
| Timeline |
| Lindeman Asia Investment |
| YOUNGHWA TECH |
Lindeman Asia and YOUNGHWA TECH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lindeman Asia and YOUNGHWA TECH
The main advantage of trading using opposite Lindeman Asia and YOUNGHWA TECH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lindeman Asia position performs unexpectedly, YOUNGHWA TECH 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 YOUNGHWA TECH will offset losses from the drop in YOUNGHWA TECH's long position.| Lindeman Asia vs. Hanwha InvestmentSecurities Co | Lindeman Asia vs. Solution Advanced Technology | Lindeman Asia vs. Busan Industrial Co | Lindeman Asia vs. Busan Ind |
| YOUNGHWA TECH vs. Lindeman Asia Investment | YOUNGHWA TECH vs. SS TECH | YOUNGHWA TECH vs. Sungchang Autotech Co | YOUNGHWA TECH vs. DB Financial Investment |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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