Correlation Between LAKE MATERIALS and Aprogen Healthcare
Can any of the company-specific risk be diversified away by investing in both LAKE MATERIALS and Aprogen Healthcare 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 Aprogen Healthcare 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 Aprogen Healthcare Games, you can compare the effects of market volatilities on LAKE MATERIALS and Aprogen Healthcare 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 Aprogen Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of LAKE MATERIALS and Aprogen Healthcare.
Diversification Opportunities for LAKE MATERIALS and Aprogen Healthcare
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between LAKE and Aprogen is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding LAKE MATERIALS LTD and Aprogen Healthcare Games in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aprogen Healthcare Games 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 Aprogen Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aprogen Healthcare Games has no effect on the direction of LAKE MATERIALS i.e., LAKE MATERIALS and Aprogen Healthcare go up and down completely randomly.
Pair Corralation between LAKE MATERIALS and Aprogen Healthcare
Assuming the 90 days trading horizon LAKE MATERIALS LTD is expected to under-perform the Aprogen Healthcare. But the stock apears to be less risky and, when comparing its historical volatility, LAKE MATERIALS LTD is 1.4 times less risky than Aprogen Healthcare. The stock trades about -0.41 of its potential returns per unit of risk. The Aprogen Healthcare Games is currently generating about -0.18 of returns per unit of risk over similar time horizon. If you would invest 55,400 in Aprogen Healthcare Games on September 3, 2024 and sell it today you would lose (9,600) from holding Aprogen Healthcare Games or give up 17.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LAKE MATERIALS LTD vs. Aprogen Healthcare Games
Performance |
| Timeline |
| LAKE MATERIALS LTD |
| Aprogen Healthcare Games |
LAKE MATERIALS and Aprogen Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LAKE MATERIALS and Aprogen Healthcare
The main advantage of trading using opposite LAKE MATERIALS and Aprogen Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LAKE MATERIALS position performs unexpectedly, Aprogen Healthcare 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 Aprogen Healthcare will offset losses from the drop in Aprogen Healthcare'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 |
| Aprogen Healthcare vs. Display Tech Co | Aprogen Healthcare vs. Sam Yang Foods | Aprogen Healthcare vs. Organic Special Pet | Aprogen Healthcare vs. FoodNamoo |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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