Correlation Between Lake Materials and SHINWON STRUCTION
Can any of the company-specific risk be diversified away by investing in both Lake Materials and SHINWON STRUCTION 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 Lake Materials and SHINWON STRUCTION into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lake Materials Co and SHINWON STRUCTION COMPANY, you can compare the effects of market volatilities on Lake Materials and SHINWON STRUCTION 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 Lake Materials with a short position of SHINWON STRUCTION. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lake Materials and SHINWON STRUCTION.
Diversification Opportunities for Lake Materials and SHINWON STRUCTION
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lake and SHINWON is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Lake Materials Co and SHINWON STRUCTION COMPANY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SHINWON STRUCTION PANY and Lake Materials 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 Lake Materials Co are associated (or correlated) with SHINWON STRUCTION. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SHINWON STRUCTION PANY has no effect on the direction of Lake Materials i.e., Lake Materials and SHINWON STRUCTION go up and down completely randomly.
Pair Corralation between Lake Materials and SHINWON STRUCTION
Assuming the 90 days trading horizon Lake Materials Co is expected to under-perform the SHINWON STRUCTION. In addition to that, Lake Materials is 1.11 times more volatile than SHINWON STRUCTION COMPANY. It trades about -0.01 of its total potential returns per unit of risk. SHINWON STRUCTION COMPANY is currently generating about 0.01 per unit of volatility. If you would invest 298,000 in SHINWON STRUCTION COMPANY on November 3, 2024 and sell it today you would lose (16,500) from holding SHINWON STRUCTION COMPANY or give up 5.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.58% |
| Values | Daily Returns |
Lake Materials Co vs. SHINWON STRUCTION COMPANY
Performance |
| Timeline |
| Lake Materials |
| SHINWON STRUCTION PANY |
Lake Materials and SHINWON STRUCTION Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lake Materials and SHINWON STRUCTION
The main advantage of trading using opposite Lake Materials and SHINWON STRUCTION positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lake Materials position performs unexpectedly, SHINWON STRUCTION 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 SHINWON STRUCTION will offset losses from the drop in SHINWON STRUCTION's long position.| Lake Materials vs. Puloon Technology | Lake Materials vs. CKH Food Health | Lake Materials vs. FNSTech Co | Lake Materials vs. Samlip General Foods |
| SHINWON STRUCTION vs. Sempio Foods Co | SHINWON STRUCTION vs. Shinsegae Food | SHINWON STRUCTION vs. Digital Imaging Technology | SHINWON STRUCTION vs. Hwangkum Steel Technology |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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