Correlation Between LS Materials and AeroSpace Technology
Can any of the company-specific risk be diversified away by investing in both LS Materials and AeroSpace 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 AeroSpace 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 AeroSpace Technology of, you can compare the effects of market volatilities on LS Materials and AeroSpace 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 AeroSpace Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of LS Materials and AeroSpace Technology.
Diversification Opportunities for LS Materials and AeroSpace Technology
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 417200 and AeroSpace is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding LS Materials and AeroSpace Technology of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AeroSpace 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 AeroSpace Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AeroSpace Technology has no effect on the direction of LS Materials i.e., LS Materials and AeroSpace Technology go up and down completely randomly.
Pair Corralation between LS Materials and AeroSpace Technology
Assuming the 90 days trading horizon LS Materials is expected to under-perform the AeroSpace Technology. In addition to that, LS Materials is 1.61 times more volatile than AeroSpace Technology of. It trades about -0.07 of its total potential returns per unit of risk. AeroSpace Technology of is currently generating about 0.13 per unit of volatility. If you would invest 59,000 in AeroSpace Technology of on November 2, 2024 and sell it today you would earn a total of 17,100 from holding AeroSpace Technology of or generate 28.98% 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. AeroSpace Technology of
Performance |
| Timeline |
| LS Materials |
| AeroSpace Technology |
LS Materials and AeroSpace Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LS Materials and AeroSpace Technology
The main advantage of trading using opposite LS Materials and AeroSpace Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LS Materials position performs unexpectedly, AeroSpace 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 AeroSpace Technology will offset losses from the drop in AeroSpace Technology'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 |
| AeroSpace Technology vs. Daelim Trading Co | AeroSpace Technology vs. Sangsangin Investment Securities | AeroSpace Technology vs. Worldex Industry Trading | AeroSpace Technology vs. Husteel |
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.
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