Correlation Between Lsb Industries and Asahi Kaisei
Can any of the company-specific risk be diversified away by investing in both Lsb Industries and Asahi Kaisei 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 Lsb Industries and Asahi Kaisei into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lsb Industries and Asahi Kaisei Corp, you can compare the effects of market volatilities on Lsb Industries and Asahi Kaisei 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 Lsb Industries with a short position of Asahi Kaisei. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lsb Industries and Asahi Kaisei.
Diversification Opportunities for Lsb Industries and Asahi Kaisei
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lsb and Asahi is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Lsb Industries and Asahi Kaisei Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asahi Kaisei Corp and Lsb Industries 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 Lsb Industries are associated (or correlated) with Asahi Kaisei. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asahi Kaisei Corp has no effect on the direction of Lsb Industries i.e., Lsb Industries and Asahi Kaisei go up and down completely randomly.
Pair Corralation between Lsb Industries and Asahi Kaisei
Considering the 90-day investment horizon Lsb Industries is expected to generate 1.2 times more return on investment than Asahi Kaisei. However, Lsb Industries is 1.2 times more volatile than Asahi Kaisei Corp. It trades about 0.16 of its potential returns per unit of risk. Asahi Kaisei Corp is currently generating about 0.07 per unit of risk. If you would invest 820.00 in Lsb Industries on September 1, 2024 and sell it today you would earn a total of 63.00 from holding Lsb Industries or generate 7.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Lsb Industries vs. Asahi Kaisei Corp
Performance |
| Timeline |
| Lsb Industries |
| Asahi Kaisei Corp |
Lsb Industries and Asahi Kaisei Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lsb Industries and Asahi Kaisei
The main advantage of trading using opposite Lsb Industries and Asahi Kaisei positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lsb Industries position performs unexpectedly, Asahi Kaisei 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 Asahi Kaisei will offset losses from the drop in Asahi Kaisei's long position.| Lsb Industries vs. Green Plains Renewable | Lsb Industries vs. AdvanSix | Lsb Industries vs. Tronox Holdings PLC | Lsb Industries vs. Methanex |
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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 CEOs Directory module to screen CEOs from public companies around the world.
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