Correlation Between LAKE MATERIALS and UNISEM
Can any of the company-specific risk be diversified away by investing in both LAKE MATERIALS and UNISEM 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 UNISEM 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 UNISEM Co, you can compare the effects of market volatilities on LAKE MATERIALS and UNISEM 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 UNISEM. Check out your portfolio center. Please also check ongoing floating volatility patterns of LAKE MATERIALS and UNISEM.
Diversification Opportunities for LAKE MATERIALS and UNISEM
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between LAKE and UNISEM is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding LAKE MATERIALS LTD and UNISEM Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNISEM 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 UNISEM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNISEM has no effect on the direction of LAKE MATERIALS i.e., LAKE MATERIALS and UNISEM go up and down completely randomly.
Pair Corralation between LAKE MATERIALS and UNISEM
Assuming the 90 days trading horizon LAKE MATERIALS is expected to generate 5.47 times less return on investment than UNISEM. In addition to that, LAKE MATERIALS is 1.23 times more volatile than UNISEM Co. It trades about 0.04 of its total potential returns per unit of risk. UNISEM Co is currently generating about 0.3 per unit of volatility. If you would invest 585,863 in UNISEM Co on October 25, 2024 and sell it today you would earn a total of 81,137 from holding UNISEM Co or generate 13.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LAKE MATERIALS LTD vs. UNISEM Co
Performance |
| Timeline |
| LAKE MATERIALS LTD |
| UNISEM |
LAKE MATERIALS and UNISEM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LAKE MATERIALS and UNISEM
The main advantage of trading using opposite LAKE MATERIALS and UNISEM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LAKE MATERIALS position performs unexpectedly, UNISEM 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 UNISEM will offset losses from the drop in UNISEM's long position.| LAKE MATERIALS vs. Samsung Electronics Co | LAKE MATERIALS vs. Samsung Electronics Co | LAKE MATERIALS vs. LG Energy Solution | LAKE MATERIALS vs. SK Hynix |
| UNISEM vs. SEOJEON ELECTRIC MACHINERY | UNISEM vs. Organic Special Pet | UNISEM vs. CJ Seafood Corp | UNISEM vs. Kyeryong Construction Industrial |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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