Correlation Between LB Investment and Daol Investment
Can any of the company-specific risk be diversified away by investing in both LB Investment and Daol 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 Daol 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 Daol Investment Securities, you can compare the effects of market volatilities on LB Investment and Daol 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 Daol Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of LB Investment and Daol Investment.
Diversification Opportunities for LB Investment and Daol Investment
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between 309960 and Daol is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding LB Investment and Daol Investment Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daol Investment Secu 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 Daol Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daol Investment Secu has no effect on the direction of LB Investment i.e., LB Investment and Daol Investment go up and down completely randomly.
Pair Corralation between LB Investment and Daol Investment
Assuming the 90 days trading horizon LB Investment is expected to under-perform the Daol Investment. But the stock apears to be less risky and, when comparing its historical volatility, LB Investment is 2.54 times less risky than Daol Investment. The stock trades about -0.08 of its potential returns per unit of risk. The Daol Investment Securities is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 290,500 in Daol Investment Securities on October 20, 2024 and sell it today you would earn a total of 2,500 from holding Daol Investment Securities or generate 0.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LB Investment vs. Daol Investment Securities
Performance |
| Timeline |
| LB Investment |
| Daol Investment Secu |
LB Investment and Daol Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LB Investment and Daol Investment
The main advantage of trading using opposite LB Investment and Daol Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LB Investment position performs unexpectedly, Daol 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 Daol Investment will offset losses from the drop in Daol Investment's long position.| LB Investment vs. Hotel Shilla Co | LB Investment vs. Hanjin Transportation Co | LB Investment vs. Camus Engineering Construction | LB Investment vs. KCC Engineering Construction |
| Daol Investment vs. Daiyang Metal Co | Daol Investment vs. GS Retail Co | Daol Investment vs. BGF Retail Co | Daol Investment vs. Myoung Shin Industrial |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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