Correlation Between Hyosung Advanced and Lion Chemtech
Can any of the company-specific risk be diversified away by investing in both Hyosung Advanced and Lion Chemtech 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 Hyosung Advanced and Lion Chemtech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyosung Advanced Materials and Lion Chemtech Co, you can compare the effects of market volatilities on Hyosung Advanced and Lion Chemtech 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 Hyosung Advanced with a short position of Lion Chemtech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyosung Advanced and Lion Chemtech.
Diversification Opportunities for Hyosung Advanced and Lion Chemtech
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hyosung and Lion is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Hyosung Advanced Materials and Lion Chemtech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lion Chemtech and Hyosung Advanced 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 Hyosung Advanced Materials are associated (or correlated) with Lion Chemtech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lion Chemtech has no effect on the direction of Hyosung Advanced i.e., Hyosung Advanced and Lion Chemtech go up and down completely randomly.
Pair Corralation between Hyosung Advanced and Lion Chemtech
Assuming the 90 days trading horizon Hyosung Advanced Materials is expected to generate 2.66 times more return on investment than Lion Chemtech. However, Hyosung Advanced is 2.66 times more volatile than Lion Chemtech Co. It trades about 0.22 of its potential returns per unit of risk. Lion Chemtech Co is currently generating about -0.32 per unit of risk. If you would invest 18,420,000 in Hyosung Advanced Materials on November 22, 2024 and sell it today you would earn a total of 2,630,000 from holding Hyosung Advanced Materials or generate 14.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyosung Advanced Materials vs. Lion Chemtech Co
Performance |
| Timeline |
| Hyosung Advanced Mat |
| Lion Chemtech |
Hyosung Advanced and Lion Chemtech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyosung Advanced and Lion Chemtech
The main advantage of trading using opposite Hyosung Advanced and Lion Chemtech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyosung Advanced position performs unexpectedly, Lion Chemtech 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 Lion Chemtech will offset losses from the drop in Lion Chemtech's long position.| Hyosung Advanced vs. Hansol Chemical Co | Hyosung Advanced vs. Kyung In Synthetic Corp | Hyosung Advanced vs. LG Household Healthcare | Hyosung Advanced vs. Sung Bo Chemicals |
| Lion Chemtech vs. Coloray International Investment | Lion Chemtech vs. MetaLabs Co | Lion Chemtech vs. Hyunwoo Industrial Co | Lion Chemtech vs. Songwon Industrial 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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