Correlation Between LB Investment and Innometry
Can any of the company-specific risk be diversified away by investing in both LB Investment and Innometry 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 Innometry into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LB Investment and Innometry Co, you can compare the effects of market volatilities on LB Investment and Innometry 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 Innometry. Check out your portfolio center. Please also check ongoing floating volatility patterns of LB Investment and Innometry.
Diversification Opportunities for LB Investment and Innometry
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between 309960 and Innometry is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding LB Investment and Innometry Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innometry 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 Innometry. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innometry has no effect on the direction of LB Investment i.e., LB Investment and Innometry go up and down completely randomly.
Pair Corralation between LB Investment and Innometry
Assuming the 90 days trading horizon LB Investment is expected to generate 1.22 times more return on investment than Innometry. However, LB Investment is 1.22 times more volatile than Innometry Co. It trades about -0.09 of its potential returns per unit of risk. Innometry Co is currently generating about -0.11 per unit of risk. If you would invest 330,000 in LB Investment on October 14, 2024 and sell it today you would lose (13,000) from holding LB Investment or give up 3.94% 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. Innometry Co
Performance |
| Timeline |
| LB Investment |
| Innometry |
LB Investment and Innometry Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LB Investment and Innometry
The main advantage of trading using opposite LB Investment and Innometry positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LB Investment position performs unexpectedly, Innometry 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 Innometry will offset losses from the drop in Innometry's long position.| LB Investment vs. A Tech Solution Co | LB Investment vs. KMH Hitech Co | LB Investment vs. Yura Tech Co | LB Investment vs. RFTech Co |
| Innometry vs. KPX Green Chemical | Innometry vs. Tae Kyung Chemical | Innometry vs. Miwon Chemical | Innometry vs. FOODWELL 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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