Correlation Between LEENO Industrial and Seegene

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Can any of the company-specific risk be diversified away by investing in both LEENO Industrial and Seegene 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 LEENO Industrial and Seegene into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LEENO Industrial and Seegene, you can compare the effects of market volatilities on LEENO Industrial and Seegene 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 LEENO Industrial with a short position of Seegene. Check out your portfolio center. Please also check ongoing floating volatility patterns of LEENO Industrial and Seegene.

Diversification Opportunities for LEENO Industrial and Seegene

0.71
  Correlation Coefficient

Poor diversification

The 3 months correlation between LEENO and Seegene is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding LEENO Industrial and Seegene in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seegene and LEENO Industrial 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 LEENO Industrial are associated (or correlated) with Seegene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seegene has no effect on the direction of LEENO Industrial i.e., LEENO Industrial and Seegene go up and down completely randomly.

Pair Corralation between LEENO Industrial and Seegene

Assuming the 90 days trading horizon LEENO Industrial is expected to generate 0.92 times more return on investment than Seegene. However, LEENO Industrial is 1.09 times less risky than Seegene. It trades about 0.09 of its potential returns per unit of risk. Seegene is currently generating about 0.04 per unit of risk. If you would invest  18,362,900  in LEENO Industrial on October 21, 2024 and sell it today you would earn a total of  2,537,100  from holding LEENO Industrial or generate 13.82% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

LEENO Industrial  vs.  Seegene

 Performance 
       Timeline  
LEENO Industrial 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in LEENO Industrial are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, LEENO Industrial sustained solid returns over the last few months and may actually be approaching a breakup point.
Seegene 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Seegene are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Seegene may actually be approaching a critical reversion point that can send shares even higher in February 2025.

LEENO Industrial and Seegene Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with LEENO Industrial and Seegene

The main advantage of trading using opposite LEENO Industrial and Seegene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LEENO Industrial position performs unexpectedly, Seegene 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 Seegene will offset losses from the drop in Seegene's long position.
The idea behind LEENO Industrial and Seegene pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.

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