Correlation Between LS Materials and Genic
Can any of the company-specific risk be diversified away by investing in both LS Materials and Genic 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 Genic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LS Materials and Genic Co, you can compare the effects of market volatilities on LS Materials and Genic 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 Genic. Check out your portfolio center. Please also check ongoing floating volatility patterns of LS Materials and Genic.
Diversification Opportunities for LS Materials and Genic
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between 417200 and Genic is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding LS Materials and Genic Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genic 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 Genic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genic has no effect on the direction of LS Materials i.e., LS Materials and Genic go up and down completely randomly.
Pair Corralation between LS Materials and Genic
Assuming the 90 days trading horizon LS Materials is expected to generate 12.47 times less return on investment than Genic. But when comparing it to its historical volatility, LS Materials is 1.65 times less risky than Genic. It trades about 0.03 of its potential returns per unit of risk. Genic Co is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 1,650,000 in Genic Co on October 17, 2024 and sell it today you would earn a total of 885,000 from holding Genic Co or generate 53.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LS Materials vs. Genic Co
Performance |
| Timeline |
| LS Materials |
| Genic |
LS Materials and Genic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LS Materials and Genic
The main advantage of trading using opposite LS Materials and Genic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LS Materials position performs unexpectedly, Genic 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 Genic will offset losses from the drop in Genic's long position.| LS Materials vs. Lee Ku Industrial | LS Materials vs. Songwon Industrial Co | LS Materials vs. InfoBank | LS Materials vs. Formetal Co |
| Genic vs. National Plastic Co | Genic vs. Dong A Steel Technology | Genic vs. Korea Steel Co | Genic vs. LS Materials |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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