Correlation Between LB Investment and Heungkuk Metaltech
Can any of the company-specific risk be diversified away by investing in both LB Investment and Heungkuk Metaltech 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 LB Investment and Heungkuk Metaltech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LB Investment and Heungkuk Metaltech CoLtd, you can compare the effects of market volatilities on LB Investment and Heungkuk Metaltech 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 LB Investment with a short position of Heungkuk Metaltech. Check out your portfolio center. Please also check ongoing floating volatility patterns of LB Investment and Heungkuk Metaltech.
Diversification Opportunities for LB Investment and Heungkuk Metaltech
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 309960 and Heungkuk is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding LB Investment and Heungkuk Metaltech CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heungkuk Metaltech CoLtd and LB 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 LB Investment are associated (or correlated) with Heungkuk Metaltech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heungkuk Metaltech CoLtd has no effect on the direction of LB Investment i.e., LB Investment and Heungkuk Metaltech go up and down completely randomly.
Pair Corralation between LB Investment and Heungkuk Metaltech
Assuming the 90 days trading horizon LB Investment is expected to under-perform the Heungkuk Metaltech. In addition to that, LB Investment is 1.11 times more volatile than Heungkuk Metaltech CoLtd. It trades about -0.2 of its total potential returns per unit of risk. Heungkuk Metaltech CoLtd is currently generating about 0.26 per unit of volatility. If you would invest 479,000 in Heungkuk Metaltech CoLtd on September 13, 2024 and sell it today you would earn a total of 84,000 from holding Heungkuk Metaltech CoLtd or generate 17.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LB Investment vs. Heungkuk Metaltech CoLtd
Performance |
| Timeline |
| LB Investment |
| Heungkuk Metaltech CoLtd |
LB Investment and Heungkuk Metaltech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LB Investment and Heungkuk Metaltech
The main advantage of trading using opposite LB Investment and Heungkuk Metaltech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LB Investment position performs unexpectedly, Heungkuk Metaltech 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 Heungkuk Metaltech will offset losses from the drop in Heungkuk Metaltech's long position.| LB Investment vs. Samsung Electronics Co | LB Investment vs. Samsung Electronics Co | LB Investment vs. LG Energy Solution | LB Investment vs. SK Hynix |
| Heungkuk Metaltech vs. Korea New Network | Heungkuk Metaltech vs. Solution Advanced Technology | Heungkuk Metaltech vs. Busan Industrial Co | Heungkuk Metaltech vs. Busan Ind |
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.
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