Correlation Between LAKE MATERIALS and Korea Investment
Can any of the company-specific risk be diversified away by investing in both LAKE MATERIALS and Korea Investment 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 Korea Investment 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 Korea Investment Holdings, you can compare the effects of market volatilities on LAKE MATERIALS and Korea Investment 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 Korea Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of LAKE MATERIALS and Korea Investment.
Diversification Opportunities for LAKE MATERIALS and Korea Investment
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between LAKE and Korea is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding LAKE MATERIALS LTD and Korea Investment Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Investment Holdings 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 Korea Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Investment Holdings has no effect on the direction of LAKE MATERIALS i.e., LAKE MATERIALS and Korea Investment go up and down completely randomly.
Pair Corralation between LAKE MATERIALS and Korea Investment
Assuming the 90 days trading horizon LAKE MATERIALS LTD is expected to generate 3.4 times more return on investment than Korea Investment. However, LAKE MATERIALS is 3.4 times more volatile than Korea Investment Holdings. It trades about 0.06 of its potential returns per unit of risk. Korea Investment Holdings is currently generating about 0.04 per unit of risk. If you would invest 472,000 in LAKE MATERIALS LTD on September 12, 2024 and sell it today you would earn a total of 579,000 from holding LAKE MATERIALS LTD or generate 122.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LAKE MATERIALS LTD vs. Korea Investment Holdings
Performance |
| Timeline |
| LAKE MATERIALS LTD |
| Korea Investment Holdings |
LAKE MATERIALS and Korea Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LAKE MATERIALS and Korea Investment
The main advantage of trading using opposite LAKE MATERIALS and Korea Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LAKE MATERIALS position performs unexpectedly, Korea Investment 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 Korea Investment will offset losses from the drop in Korea Investment'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 |
| Korea Investment vs. LAKE MATERIALS LTD | Korea Investment vs. Hyundai Engineering Plastics | Korea Investment vs. Top Material Co | Korea Investment vs. Kbi Metal Co |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |