Correlation Between LS Materials and Oriental Precision
Can any of the company-specific risk be diversified away by investing in both LS Materials and Oriental Precision 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 Oriental Precision into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LS Materials and Oriental Precision Engineering, you can compare the effects of market volatilities on LS Materials and Oriental Precision 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 Oriental Precision. Check out your portfolio center. Please also check ongoing floating volatility patterns of LS Materials and Oriental Precision.
Diversification Opportunities for LS Materials and Oriental Precision
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 417200 and Oriental is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding LS Materials and Oriental Precision Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oriental Precision 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 Oriental Precision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oriental Precision has no effect on the direction of LS Materials i.e., LS Materials and Oriental Precision go up and down completely randomly.
Pair Corralation between LS Materials and Oriental Precision
Assuming the 90 days trading horizon LS Materials is expected to under-perform the Oriental Precision. In addition to that, LS Materials is 1.03 times more volatile than Oriental Precision Engineering. It trades about -0.03 of its total potential returns per unit of risk. Oriental Precision Engineering is currently generating about 0.23 per unit of volatility. If you would invest 336,385 in Oriental Precision Engineering on October 27, 2024 and sell it today you would earn a total of 236,615 from holding Oriental Precision Engineering or generate 70.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.41% |
| Values | Daily Returns |
LS Materials vs. Oriental Precision Engineering
Performance |
| Timeline |
| LS Materials |
| Oriental Precision |
LS Materials and Oriental Precision Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LS Materials and Oriental Precision
The main advantage of trading using opposite LS Materials and Oriental Precision positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LS Materials position performs unexpectedly, Oriental Precision 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 Oriental Precision will offset losses from the drop in Oriental Precision's long position.| LS Materials vs. Dongkuk Structures Construction | LS Materials vs. Dongwoo Farm To | LS Materials vs. Jeju Bank | LS Materials vs. Settlebank |
| Oriental Precision vs. GS Retail Co | Oriental Precision vs. CKH Food Health | Oriental Precision vs. Chorokbaem Healthcare Co | Oriental Precision vs. Samyang Foods 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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