Correlation Between LS Materials and Heungkuk Metaltech
Can any of the company-specific risk be diversified away by investing in both LS Materials and Heungkuk Metaltech 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 LS Materials and Heungkuk Metaltech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LS Materials and Heungkuk Metaltech CoLtd, you can compare the effects of market volatilities on LS Materials and Heungkuk Metaltech 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 LS Materials with a short position of Heungkuk Metaltech. Check out your portfolio center. Please also check ongoing floating volatility patterns of LS Materials and Heungkuk Metaltech.
Diversification Opportunities for LS Materials and Heungkuk Metaltech
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 417200 and Heungkuk is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding LS Materials and Heungkuk Metaltech CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heungkuk Metaltech CoLtd and LS Materials 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 LS Materials are associated (or correlated) with Heungkuk Metaltech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heungkuk Metaltech CoLtd has no effect on the direction of LS Materials i.e., LS Materials and Heungkuk Metaltech go up and down completely randomly.
Pair Corralation between LS Materials and Heungkuk Metaltech
Assuming the 90 days trading horizon LS Materials is expected to generate 3.86 times more return on investment than Heungkuk Metaltech. However, LS Materials is 3.86 times more volatile than Heungkuk Metaltech CoLtd. It trades about 0.22 of its potential returns per unit of risk. Heungkuk Metaltech CoLtd is currently generating about -0.09 per unit of risk. If you would invest 1,116,000 in LS Materials on October 28, 2024 and sell it today you would earn a total of 250,000 from holding LS Materials or generate 22.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LS Materials vs. Heungkuk Metaltech CoLtd
Performance |
| Timeline |
| LS Materials |
| Heungkuk Metaltech CoLtd |
LS Materials and Heungkuk Metaltech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LS Materials and Heungkuk Metaltech
The main advantage of trading using opposite LS Materials and Heungkuk Metaltech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LS Materials position performs unexpectedly, Heungkuk Metaltech 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 Heungkuk Metaltech will offset losses from the drop in Heungkuk Metaltech's long position.| LS Materials vs. Samsung Electronics Co | LS Materials vs. Samsung Electronics Co | LS Materials vs. LG Energy Solution | LS Materials vs. SK Hynix |
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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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