Correlation Between LS Materials and Insun Environment
Can any of the company-specific risk be diversified away by investing in both LS Materials and Insun Environment 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 Insun Environment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LS Materials and Insun Environment New, you can compare the effects of market volatilities on LS Materials and Insun Environment 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 Insun Environment. Check out your portfolio center. Please also check ongoing floating volatility patterns of LS Materials and Insun Environment.
Diversification Opportunities for LS Materials and Insun Environment
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 417200 and Insun is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding LS Materials and Insun Environment New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insun Environment New 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 Insun Environment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insun Environment New has no effect on the direction of LS Materials i.e., LS Materials and Insun Environment go up and down completely randomly.
Pair Corralation between LS Materials and Insun Environment
Assuming the 90 days trading horizon LS Materials is expected to under-perform the Insun Environment. In addition to that, LS Materials is 1.52 times more volatile than Insun Environment New. It trades about -0.03 of its total potential returns per unit of risk. Insun Environment New is currently generating about 0.03 per unit of volatility. If you would invest 550,000 in Insun Environment New on November 8, 2024 and sell it today you would earn a total of 14,000 from holding Insun Environment New or generate 2.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LS Materials vs. Insun Environment New
Performance |
| Timeline |
| LS Materials |
| Insun Environment New |
LS Materials and Insun Environment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LS Materials and Insun Environment
The main advantage of trading using opposite LS Materials and Insun Environment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LS Materials position performs unexpectedly, Insun Environment 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 Insun Environment will offset losses from the drop in Insun Environment'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 |
| Insun Environment vs. Dgb Financial | Insun Environment vs. PJ Metal Co | Insun Environment vs. DONGKUK TED METAL | Insun Environment vs. KakaoBank 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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