Correlation Between LB Investment and Atinum Investment
Can any of the company-specific risk be diversified away by investing in both LB Investment and Atinum Investment 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 Atinum Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LB Investment and Atinum Investment Co, you can compare the effects of market volatilities on LB Investment and Atinum Investment 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 Atinum Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of LB Investment and Atinum Investment.
Diversification Opportunities for LB Investment and Atinum Investment
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between 309960 and Atinum is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding LB Investment and Atinum Investment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atinum Investment 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 Atinum Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atinum Investment has no effect on the direction of LB Investment i.e., LB Investment and Atinum Investment go up and down completely randomly.
Pair Corralation between LB Investment and Atinum Investment
Assuming the 90 days trading horizon LB Investment is expected to generate 0.32 times more return on investment than Atinum Investment. However, LB Investment is 3.15 times less risky than Atinum Investment. It trades about -0.22 of its potential returns per unit of risk. Atinum Investment Co is currently generating about -0.08 per unit of risk. If you would invest 388,500 in LB Investment on August 25, 2024 and sell it today you would lose (18,000) from holding LB Investment or give up 4.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LB Investment vs. Atinum Investment Co
Performance |
| Timeline |
| LB Investment |
| Atinum Investment |
LB Investment and Atinum Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LB Investment and Atinum Investment
The main advantage of trading using opposite LB Investment and Atinum Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LB Investment position performs unexpectedly, Atinum Investment 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 Atinum Investment will offset losses from the drop in Atinum Investment's long position.| LB Investment vs. BIT Computer Co | LB Investment vs. Lotte Data Communication | LB Investment vs. Shinsegae Information Communication | LB Investment vs. LG Display Co |
| Atinum Investment vs. Korea New Network | Atinum Investment vs. Dong A Eltek | Atinum Investment vs. Dreamus Company | Atinum Investment vs. SK Bioscience 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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