Correlation Between LAKE MATERIALS and Tway Air
Can any of the company-specific risk be diversified away by investing in both LAKE MATERIALS and Tway 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 Tway 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 Tway Air Co, you can compare the effects of market volatilities on LAKE MATERIALS and Tway 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 Tway Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of LAKE MATERIALS and Tway Air.
Diversification Opportunities for LAKE MATERIALS and Tway Air
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between LAKE and Tway is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding LAKE MATERIALS LTD and Tway Air Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tway 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 Tway Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tway Air has no effect on the direction of LAKE MATERIALS i.e., LAKE MATERIALS and Tway Air go up and down completely randomly.
Pair Corralation between LAKE MATERIALS and Tway Air
Assuming the 90 days trading horizon LAKE MATERIALS LTD is expected to under-perform the Tway Air. In addition to that, LAKE MATERIALS is 1.21 times more volatile than Tway Air Co. It trades about -0.28 of its total potential returns per unit of risk. Tway Air Co is currently generating about -0.26 per unit of volatility. If you would invest 349,000 in Tway Air Co on September 1, 2024 and sell it today you would lose (54,500) from holding Tway Air Co or give up 15.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LAKE MATERIALS LTD vs. Tway Air Co
Performance |
| Timeline |
| LAKE MATERIALS LTD |
| Tway Air |
LAKE MATERIALS and Tway Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LAKE MATERIALS and Tway Air
The main advantage of trading using opposite LAKE MATERIALS and Tway Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LAKE MATERIALS position performs unexpectedly, Tway 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 Tway Air will offset losses from the drop in Tway 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 |
| Tway Air vs. Hanwha InvestmentSecurities Co | Tway Air vs. EBEST Investment Securities | Tway Air vs. Lindeman Asia Investment | Tway Air vs. E Investment Development |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |