Correlation Between SV Investment and Lindeman Asia
Can any of the company-specific risk be diversified away by investing in both SV Investment and Lindeman Asia 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 SV Investment and Lindeman Asia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SV Investment and Lindeman Asia Investment, you can compare the effects of market volatilities on SV Investment and Lindeman Asia 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 SV Investment with a short position of Lindeman Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of SV Investment and Lindeman Asia.
Diversification Opportunities for SV Investment and Lindeman Asia
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 289080 and Lindeman is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding SV Investment and Lindeman Asia Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lindeman Asia Investment and SV Investment 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 SV Investment are associated (or correlated) with Lindeman Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lindeman Asia Investment has no effect on the direction of SV Investment i.e., SV Investment and Lindeman Asia go up and down completely randomly.
Pair Corralation between SV Investment and Lindeman Asia
Assuming the 90 days trading horizon SV Investment is expected to under-perform the Lindeman Asia. But the stock apears to be less risky and, when comparing its historical volatility, SV Investment is 1.4 times less risky than Lindeman Asia. The stock trades about -0.28 of its potential returns per unit of risk. The Lindeman Asia Investment is currently generating about -0.14 of returns per unit of risk over similar time horizon. If you would invest 387,000 in Lindeman Asia Investment on August 31, 2024 and sell it today you would lose (45,000) from holding Lindeman Asia Investment or give up 11.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SV Investment vs. Lindeman Asia Investment
Performance |
| Timeline |
| SV Investment |
| Lindeman Asia Investment |
SV Investment and Lindeman Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SV Investment and Lindeman Asia
The main advantage of trading using opposite SV Investment and Lindeman Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SV Investment position performs unexpectedly, Lindeman Asia 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 Lindeman Asia will offset losses from the drop in Lindeman Asia's long position.| SV Investment vs. QUALITAS SEMICONDUCTOR LTD | SV Investment vs. KEPCO Engineering Construction | SV Investment vs. Home Center Holdings | SV Investment vs. GS Engineering Construction |
| Lindeman Asia vs. Atinum Investment Co | Lindeman Asia vs. SBI Investment KOREA | Lindeman Asia vs. Daesung Private Equity | Lindeman Asia vs. Solution Advanced Technology |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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