Correlation Between LS Materials and HYBE
Can any of the company-specific risk be diversified away by investing in both LS Materials and HYBE 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 HYBE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LS Materials and HYBE Co, you can compare the effects of market volatilities on LS Materials and HYBE 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 HYBE. Check out your portfolio center. Please also check ongoing floating volatility patterns of LS Materials and HYBE.
Diversification Opportunities for LS Materials and HYBE
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 417200 and HYBE is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding LS Materials and HYBE Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HYBE 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 HYBE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HYBE has no effect on the direction of LS Materials i.e., LS Materials and HYBE go up and down completely randomly.
Pair Corralation between LS Materials and HYBE
Assuming the 90 days trading horizon LS Materials is expected to generate 7.16 times more return on investment than HYBE. However, LS Materials is 7.16 times more volatile than HYBE Co. It trades about 0.05 of its potential returns per unit of risk. HYBE Co is currently generating about 0.02 per unit of risk. If you would invest 599,449 in LS Materials on October 7, 2024 and sell it today you would earn a total of 625,551 from holding LS Materials or generate 104.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 54.15% |
| Values | Daily Returns |
LS Materials vs. HYBE Co
Performance |
| Timeline |
| LS Materials |
| HYBE |
LS Materials and HYBE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LS Materials and HYBE
The main advantage of trading using opposite LS Materials and HYBE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LS Materials position performs unexpectedly, HYBE 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 HYBE will offset losses from the drop in HYBE'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 |
| HYBE vs. KyungIn Electronics Co | HYBE vs. Korea Electronic Certification | HYBE vs. Okins Electronics Co | HYBE vs. Sangsin Energy Display |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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