Correlation Between LS Materials and DoubleU Games
Can any of the company-specific risk be diversified away by investing in both LS Materials and DoubleU Games 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 DoubleU Games into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LS Materials and DoubleU Games Co, you can compare the effects of market volatilities on LS Materials and DoubleU Games 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 DoubleU Games. Check out your portfolio center. Please also check ongoing floating volatility patterns of LS Materials and DoubleU Games.
Diversification Opportunities for LS Materials and DoubleU Games
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 417200 and DoubleU is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding LS Materials and DoubleU Games Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DoubleU Games 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 DoubleU Games. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DoubleU Games has no effect on the direction of LS Materials i.e., LS Materials and DoubleU Games go up and down completely randomly.
Pair Corralation between LS Materials and DoubleU Games
Assuming the 90 days trading horizon LS Materials is expected to generate 2.95 times more return on investment than DoubleU Games. However, LS Materials is 2.95 times more volatile than DoubleU Games Co. It trades about 0.12 of its potential returns per unit of risk. DoubleU Games Co is currently generating about -0.04 per unit of risk. If you would invest 1,149,000 in LS Materials on October 30, 2024 and sell it today you would earn a total of 217,000 from holding LS Materials or generate 18.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LS Materials vs. DoubleU Games Co
Performance |
| Timeline |
| LS Materials |
| DoubleU Games |
LS Materials and DoubleU Games Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LS Materials and DoubleU Games
The main advantage of trading using opposite LS Materials and DoubleU Games positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LS Materials position performs unexpectedly, DoubleU Games 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 DoubleU Games will offset losses from the drop in DoubleU Games' long position.| LS Materials vs. PlayD Co | LS Materials vs. FOODWELL Co | LS Materials vs. Sempio Foods Co | LS Materials vs. CJ Seafood Corp |
| DoubleU Games vs. Global Standard Technology | DoubleU Games vs. Bosung Power Technology | DoubleU Games vs. Taegu Broadcasting | DoubleU Games vs. Clean Science 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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