Correlation Between LDG Investment and Book
Can any of the company-specific risk be diversified away by investing in both LDG Investment and Book 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 LDG Investment and Book into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LDG Investment JSC and Book And Educational, you can compare the effects of market volatilities on LDG Investment and Book 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 LDG Investment with a short position of Book. Check out your portfolio center. Please also check ongoing floating volatility patterns of LDG Investment and Book.
Diversification Opportunities for LDG Investment and Book
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between LDG and Book is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding LDG Investment JSC and Book And Educational in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Book And Educational and LDG Investment 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 LDG Investment JSC are associated (or correlated) with Book. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Book And Educational has no effect on the direction of LDG Investment i.e., LDG Investment and Book go up and down completely randomly.
Pair Corralation between LDG Investment and Book
Assuming the 90 days trading horizon LDG Investment JSC is expected to under-perform the Book. But the stock apears to be less risky and, when comparing its historical volatility, LDG Investment JSC is 2.3 times less risky than Book. The stock trades about -0.56 of its potential returns per unit of risk. The Book And Educational is currently generating about 0.5 of returns per unit of risk over similar time horizon. If you would invest 1,700,000 in Book And Educational on November 3, 2024 and sell it today you would earn a total of 50,000 from holding Book And Educational or generate 2.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 22.22% |
| Values | Daily Returns |
LDG Investment JSC vs. Book And Educational
Performance |
| Timeline |
| LDG Investment JSC |
| Book And Educational |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
LDG Investment and Book Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LDG Investment and Book
The main advantage of trading using opposite LDG Investment and Book positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LDG Investment position performs unexpectedly, Book 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 Book will offset losses from the drop in Book's long position.| LDG Investment vs. FIT INVEST JSC | LDG Investment vs. Damsan JSC | LDG Investment vs. An Phat Plastic | LDG Investment vs. APG Securities Joint |
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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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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