Correlation Between LAKE MATERIALS and Daishin Information
Can any of the company-specific risk be diversified away by investing in both LAKE MATERIALS and Daishin Information 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 Daishin Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LAKE MATERIALS LTD and Daishin Information Communications, you can compare the effects of market volatilities on LAKE MATERIALS and Daishin Information 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 Daishin Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of LAKE MATERIALS and Daishin Information.
Diversification Opportunities for LAKE MATERIALS and Daishin Information
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between LAKE and Daishin is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding LAKE MATERIALS LTD and Daishin Information Communicat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daishin Information 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 LTD are associated (or correlated) with Daishin Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daishin Information has no effect on the direction of LAKE MATERIALS i.e., LAKE MATERIALS and Daishin Information go up and down completely randomly.
Pair Corralation between LAKE MATERIALS and Daishin Information
Assuming the 90 days trading horizon LAKE MATERIALS is expected to generate 10.01 times less return on investment than Daishin Information. But when comparing it to its historical volatility, LAKE MATERIALS LTD is 1.54 times less risky than Daishin Information. It trades about 0.02 of its potential returns per unit of risk. Daishin Information Communications is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 84,600 in Daishin Information Communications on November 3, 2024 and sell it today you would earn a total of 18,400 from holding Daishin Information Communications or generate 21.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LAKE MATERIALS LTD vs. Daishin Information Communicat
Performance |
| Timeline |
| LAKE MATERIALS LTD |
| Daishin Information |
LAKE MATERIALS and Daishin Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LAKE MATERIALS and Daishin Information
The main advantage of trading using opposite LAKE MATERIALS and Daishin Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LAKE MATERIALS position performs unexpectedly, Daishin Information 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 Daishin Information will offset losses from the drop in Daishin Information's long position.| LAKE MATERIALS vs. Lotte Non Life Insurance | LAKE MATERIALS vs. Seers Technology | LAKE MATERIALS vs. Korean Reinsurance Co | LAKE MATERIALS vs. Pureun Mutual Savings |
| Daishin Information vs. NICE Information Service | Daishin Information vs. Samlip General Foods | Daishin Information vs. DataSolution | Daishin Information vs. Daou Data 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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