Correlation Between LS Materials and Hurum
Can any of the company-specific risk be diversified away by investing in both LS Materials and Hurum 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 Hurum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LS Materials and Hurum Co, you can compare the effects of market volatilities on LS Materials and Hurum 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 Hurum. Check out your portfolio center. Please also check ongoing floating volatility patterns of LS Materials and Hurum.
Diversification Opportunities for LS Materials and Hurum
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between 417200 and Hurum is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding LS Materials and Hurum Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hurum 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 Hurum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hurum has no effect on the direction of LS Materials i.e., LS Materials and Hurum go up and down completely randomly.
Pair Corralation between LS Materials and Hurum
Assuming the 90 days trading horizon LS Materials is expected to generate 3.39 times more return on investment than Hurum. However, LS Materials is 3.39 times more volatile than Hurum Co. It trades about 0.3 of its potential returns per unit of risk. Hurum Co is currently generating about 0.28 per unit of risk. If you would invest 1,124,000 in LS Materials on October 25, 2024 and sell it today you would earn a total of 341,000 from holding LS Materials or generate 30.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
LS Materials vs. Hurum Co
Performance |
| Timeline |
| LS Materials |
| Hurum |
LS Materials and Hurum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LS Materials and Hurum
The main advantage of trading using opposite LS Materials and Hurum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LS Materials position performs unexpectedly, Hurum 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 Hurum will offset losses from the drop in Hurum's long position.| LS Materials vs. Samsung Life Insurance | LS Materials vs. Ssangyong Materials Corp | LS Materials vs. Korea Information Communications | LS Materials vs. Daishin Information Communications |
| Hurum vs. LS Materials | Hurum vs. Ecoplastic | Hurum vs. SBI Investment KOREA | Hurum vs. Solus Advanced 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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