Correlation Between Access Bio and LS Electric
Can any of the company-specific risk be diversified away by investing in both Access Bio and LS Electric 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 Access Bio and LS Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Access Bio and LS Electric, you can compare the effects of market volatilities on Access Bio and LS Electric 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 Access Bio with a short position of LS Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Access Bio and LS Electric.
Diversification Opportunities for Access Bio and LS Electric
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Access and 010120 is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Access Bio and LS Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LS Electric and Access Bio 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 Access Bio are associated (or correlated) with LS Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LS Electric has no effect on the direction of Access Bio i.e., Access Bio and LS Electric go up and down completely randomly.
Pair Corralation between Access Bio and LS Electric
Assuming the 90 days trading horizon Access Bio is expected to under-perform the LS Electric. In addition to that, Access Bio is 1.07 times more volatile than LS Electric. It trades about -0.01 of its total potential returns per unit of risk. LS Electric is currently generating about 0.03 per unit of volatility. If you would invest 11,040,000 in LS Electric on August 26, 2024 and sell it today you would earn a total of 2,130,000 from holding LS Electric or generate 19.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Access Bio vs. LS Electric
Performance |
| Timeline |
| Access Bio |
| LS Electric |
Access Bio and LS Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Access Bio and LS Electric
The main advantage of trading using opposite Access Bio and LS Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Access Bio position performs unexpectedly, LS Electric 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 LS Electric will offset losses from the drop in LS Electric's long position.| Access Bio vs. Lotte Data Communication | Access Bio vs. Sejong Telecom | Access Bio vs. SV Investment | Access Bio vs. Atinum Investment Co |
| LS Electric vs. Samsung Electronics Co | LS Electric vs. Samsung Electronics Co | LS Electric vs. Hyundai Motor Co | LS Electric vs. Hyundai Motor |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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