Correlation Between Hyosung Advanced and LAKE MATERIALS
Can any of the company-specific risk be diversified away by investing in both Hyosung Advanced and LAKE MATERIALS 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 LAKE MATERIALS 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 LAKE MATERIALS LTD, you can compare the effects of market volatilities on Hyosung Advanced and LAKE MATERIALS 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 LAKE MATERIALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyosung Advanced and LAKE MATERIALS.
Diversification Opportunities for Hyosung Advanced and LAKE MATERIALS
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hyosung and LAKE is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Hyosung Advanced Materials and LAKE MATERIALS LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LAKE MATERIALS LTD 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 LAKE MATERIALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LAKE MATERIALS LTD has no effect on the direction of Hyosung Advanced i.e., Hyosung Advanced and LAKE MATERIALS go up and down completely randomly.
Pair Corralation between Hyosung Advanced and LAKE MATERIALS
Assuming the 90 days trading horizon Hyosung Advanced Materials is expected to under-perform the LAKE MATERIALS. But the stock apears to be less risky and, when comparing its historical volatility, Hyosung Advanced Materials is 1.87 times less risky than LAKE MATERIALS. The stock trades about -0.1 of its potential returns per unit of risk. The LAKE MATERIALS LTD is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,177,000 in LAKE MATERIALS LTD on August 25, 2024 and sell it today you would lose (5,000) from holding LAKE MATERIALS LTD or give up 0.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyosung Advanced Materials vs. LAKE MATERIALS LTD
Performance |
| Timeline |
| Hyosung Advanced Mat |
| LAKE MATERIALS LTD |
Hyosung Advanced and LAKE MATERIALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyosung Advanced and LAKE MATERIALS
The main advantage of trading using opposite Hyosung Advanced and LAKE MATERIALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyosung Advanced position performs unexpectedly, LAKE MATERIALS 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 LAKE MATERIALS will offset losses from the drop in LAKE MATERIALS's long position.| Hyosung Advanced vs. Busan Industrial Co | Hyosung Advanced vs. Busan Ind | Hyosung Advanced vs. Mirae Asset Daewoo | Hyosung Advanced vs. UNISEM Co |
| LAKE MATERIALS vs. Samsung Electronics Co | LAKE MATERIALS vs. Samsung Electronics Co | LAKE MATERIALS vs. LG Energy Solution | LAKE MATERIALS vs. SK Hynix |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |