Correlation Between LS Materials and Daou Technology
Can any of the company-specific risk be diversified away by investing in both LS Materials and Daou Technology 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 Daou Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LS Materials and Daou Technology, you can compare the effects of market volatilities on LS Materials and Daou Technology 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 Daou Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of LS Materials and Daou Technology.
Diversification Opportunities for LS Materials and Daou Technology
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 417200 and Daou is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding LS Materials and Daou Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daou Technology 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 Daou Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daou Technology has no effect on the direction of LS Materials i.e., LS Materials and Daou Technology go up and down completely randomly.
Pair Corralation between LS Materials and Daou Technology
Assuming the 90 days trading horizon LS Materials is expected to generate 6.21 times more return on investment than Daou Technology. However, LS Materials is 6.21 times more volatile than Daou Technology. It trades about 0.1 of its potential returns per unit of risk. Daou Technology is currently generating about -0.04 per unit of risk. If you would invest 1,222,000 in LS Materials on November 7, 2024 and sell it today you would earn a total of 103,000 from holding LS Materials or generate 8.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LS Materials vs. Daou Technology
Performance |
| Timeline |
| LS Materials |
| Daou Technology |
LS Materials and Daou Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LS Materials and Daou Technology
The main advantage of trading using opposite LS Materials and Daou Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LS Materials position performs unexpectedly, Daou Technology 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 Daou Technology will offset losses from the drop in Daou Technology's long position.| LS Materials vs. Daejung Chemicals Metals | LS Materials vs. Leaders Technology Investment | LS Materials vs. Woori Technology Investment | LS Materials vs. Stic Investments |
| Daou Technology vs. DoubleU Games Co | Daou Technology vs. Woori Financial Group | Daou Technology vs. Incar Financial Service | Daou Technology vs. Netmarble Games Corp |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |