Correlation Between LAKE MATERIALS and Jeju Air
Can any of the company-specific risk be diversified away by investing in both LAKE MATERIALS and Jeju Air 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 Jeju Air 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 Jeju Air Co, you can compare the effects of market volatilities on LAKE MATERIALS and Jeju Air 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 Jeju Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of LAKE MATERIALS and Jeju Air.
Diversification Opportunities for LAKE MATERIALS and Jeju Air
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between LAKE and Jeju is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding LAKE MATERIALS LTD and Jeju Air Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeju Air 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 Jeju Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeju Air has no effect on the direction of LAKE MATERIALS i.e., LAKE MATERIALS and Jeju Air go up and down completely randomly.
Pair Corralation between LAKE MATERIALS and Jeju Air
Assuming the 90 days trading horizon LAKE MATERIALS LTD is expected to generate 2.37 times more return on investment than Jeju Air. However, LAKE MATERIALS is 2.37 times more volatile than Jeju Air Co. It trades about 0.06 of its potential returns per unit of risk. Jeju Air Co is currently generating about -0.03 per unit of risk. If you would invest 471,000 in LAKE MATERIALS LTD on September 3, 2024 and sell it today you would earn a total of 717,000 from holding LAKE MATERIALS LTD or generate 152.23% 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. Jeju Air Co
Performance |
| Timeline |
| LAKE MATERIALS LTD |
| Jeju Air |
LAKE MATERIALS and Jeju Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LAKE MATERIALS and Jeju Air
The main advantage of trading using opposite LAKE MATERIALS and Jeju Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LAKE MATERIALS position performs unexpectedly, Jeju Air 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 Jeju Air will offset losses from the drop in Jeju Air'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 |
| Jeju Air vs. LG Display | Jeju Air vs. Hyundai Motor | Jeju Air vs. Hyundai Motor Co | Jeju Air vs. Hyundai Motor 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |