Correlation Between LAKE MATERIALS and DSC Investment
Can any of the company-specific risk be diversified away by investing in both LAKE MATERIALS and DSC 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 DSC 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 DSC Investment, you can compare the effects of market volatilities on LAKE MATERIALS and DSC 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 DSC Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of LAKE MATERIALS and DSC Investment.
Diversification Opportunities for LAKE MATERIALS and DSC Investment
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between LAKE and DSC is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding LAKE MATERIALS LTD and DSC Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DSC Investment 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 DSC Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DSC Investment has no effect on the direction of LAKE MATERIALS i.e., LAKE MATERIALS and DSC Investment go up and down completely randomly.
Pair Corralation between LAKE MATERIALS and DSC Investment
Assuming the 90 days trading horizon LAKE MATERIALS LTD is expected to under-perform the DSC Investment. In addition to that, LAKE MATERIALS is 1.78 times more volatile than DSC Investment. It trades about -0.03 of its total potential returns per unit of risk. DSC Investment is currently generating about -0.02 per unit of volatility. If you would invest 342,772 in DSC Investment on November 7, 2024 and sell it today you would lose (62,772) from holding DSC Investment or give up 18.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.16% |
| Values | Daily Returns |
LAKE MATERIALS LTD vs. DSC Investment
Performance |
| Timeline |
| LAKE MATERIALS LTD |
| DSC Investment |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
LAKE MATERIALS and DSC Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LAKE MATERIALS and DSC Investment
The main advantage of trading using opposite LAKE MATERIALS and DSC Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LAKE MATERIALS position performs unexpectedly, DSC 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 DSC Investment will offset losses from the drop in DSC Investment's long position.| LAKE MATERIALS vs. JYP Entertainment Corp | LAKE MATERIALS vs. Jeju Bank | LAKE MATERIALS vs. ITM Semiconductor Co | LAKE MATERIALS vs. Nasmedia Co |
| DSC Investment vs. Settlebank | DSC Investment vs. SK Chemicals Co | DSC Investment vs. Automobile Pc | DSC Investment vs. Jeju Bank |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |