Correlation Between LB Investment and Daesung Hi-Tech
Can any of the company-specific risk be diversified away by investing in both LB Investment and Daesung Hi-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 Daesung Hi-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 Daesung Hi Tech Co, you can compare the effects of market volatilities on LB Investment and Daesung Hi-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 Daesung Hi-Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of LB Investment and Daesung Hi-Tech.
Diversification Opportunities for LB Investment and Daesung Hi-Tech
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between 309960 and Daesung is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding LB Investment and Daesung Hi Tech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daesung Hi 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 Daesung Hi-Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daesung Hi Tech has no effect on the direction of LB Investment i.e., LB Investment and Daesung Hi-Tech go up and down completely randomly.
Pair Corralation between LB Investment and Daesung Hi-Tech
Assuming the 90 days trading horizon LB Investment is expected to under-perform the Daesung Hi-Tech. In addition to that, LB Investment is 1.1 times more volatile than Daesung Hi Tech Co. It trades about -0.21 of its total potential returns per unit of risk. Daesung Hi Tech Co is currently generating about -0.05 per unit of volatility. If you would invest 365,500 in Daesung Hi Tech Co on September 14, 2024 and sell it today you would lose (15,500) from holding Daesung Hi Tech Co or give up 4.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
LB Investment vs. Daesung Hi Tech Co
Performance |
| Timeline |
| LB Investment |
| Daesung Hi Tech |
LB Investment and Daesung Hi-Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LB Investment and Daesung Hi-Tech
The main advantage of trading using opposite LB Investment and Daesung Hi-Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LB Investment position performs unexpectedly, Daesung Hi-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 Daesung Hi-Tech will offset losses from the drop in Daesung Hi-Tech'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 |
| Daesung Hi-Tech vs. Dongwoo Farm To | Daesung Hi-Tech vs. Keyang Electric Machinery | Daesung Hi-Tech vs. Shinsegae Engineering Construction | Daesung Hi-Tech vs. BIT Computer 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 CEOs Directory module to screen CEOs from public companies around the world.
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