Correlation Between Innometry and Lee Ku
Can any of the company-specific risk be diversified away by investing in both Innometry and Lee Ku 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 Innometry and Lee Ku into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innometry Co and Lee Ku Industrial, you can compare the effects of market volatilities on Innometry and Lee Ku 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 Innometry with a short position of Lee Ku. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innometry and Lee Ku.
Diversification Opportunities for Innometry and Lee Ku
Very poor diversification
The 3 months correlation between Innometry and Lee is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Innometry Co and Lee Ku Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lee Ku Industrial and Innometry 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 Innometry Co are associated (or correlated) with Lee Ku. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lee Ku Industrial has no effect on the direction of Innometry i.e., Innometry and Lee Ku go up and down completely randomly.
Pair Corralation between Innometry and Lee Ku
Assuming the 90 days trading horizon Innometry Co is expected to under-perform the Lee Ku. In addition to that, Innometry is 1.01 times more volatile than Lee Ku Industrial. It trades about -0.17 of its total potential returns per unit of risk. Lee Ku Industrial is currently generating about 0.13 per unit of volatility. If you would invest 415,000 in Lee Ku Industrial on October 17, 2024 and sell it today you would earn a total of 18,500 from holding Lee Ku Industrial or generate 4.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Innometry Co vs. Lee Ku Industrial
Performance |
| Timeline |
| Innometry |
| Lee Ku Industrial |
Innometry and Lee Ku Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innometry and Lee Ku
The main advantage of trading using opposite Innometry and Lee Ku positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innometry position performs unexpectedly, Lee Ku 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 Lee Ku will offset losses from the drop in Lee Ku's long position.| Innometry vs. Lotte Non Life Insurance | Innometry vs. SK Chemicals Co | Innometry vs. NH Investment Securities | Innometry vs. Golden Bridge Investment |
| Lee Ku vs. Haitai Confectionery Foods | Lee Ku vs. Orbitech Co | Lee Ku vs. KMH Hitech Co | Lee Ku vs. Samyang Foods 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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