Correlation Between LB Investment and Wonbang Tech
Can any of the company-specific risk be diversified away by investing in both LB Investment and Wonbang Tech 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 Wonbang Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LB Investment and Wonbang Tech Co, you can compare the effects of market volatilities on LB Investment and Wonbang Tech 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 Wonbang Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of LB Investment and Wonbang Tech.
Diversification Opportunities for LB Investment and Wonbang Tech
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between 309960 and Wonbang is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding LB Investment and Wonbang Tech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wonbang Tech 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 Wonbang Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wonbang Tech has no effect on the direction of LB Investment i.e., LB Investment and Wonbang Tech go up and down completely randomly.
Pair Corralation between LB Investment and Wonbang Tech
Assuming the 90 days trading horizon LB Investment is expected to under-perform the Wonbang Tech. But the stock apears to be less risky and, when comparing its historical volatility, LB Investment is 1.19 times less risky than Wonbang Tech. The stock trades about -0.05 of its potential returns per unit of risk. The Wonbang Tech Co is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 975,780 in Wonbang Tech Co on November 2, 2024 and sell it today you would earn a total of 449,220 from holding Wonbang Tech Co or generate 46.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 93.53% |
| Values | Daily Returns |
LB Investment vs. Wonbang Tech Co
Performance |
| Timeline |
| LB Investment |
| Wonbang Tech |
LB Investment and Wonbang Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LB Investment and Wonbang Tech
The main advantage of trading using opposite LB Investment and Wonbang Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LB Investment position performs unexpectedly, Wonbang Tech 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 Wonbang Tech will offset losses from the drop in Wonbang Tech's long position.| LB Investment vs. Digital Multimedia Technology | LB Investment vs. MEDIANA CoLtd | LB Investment vs. INFINITT Healthcare Co | LB Investment vs. Aprogen Healthcare Games |
| Wonbang Tech vs. Raontech | Wonbang Tech vs. Sam Yang Foods | Wonbang Tech vs. Sempio Foods Co | Wonbang Tech vs. Organic Special Pet |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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