Correlation Between LG Uplus and KTB Investment
Can any of the company-specific risk be diversified away by investing in both LG Uplus and KTB Investment 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 LG Uplus and KTB Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LG Uplus and KTB Investment Securities, you can compare the effects of market volatilities on LG Uplus and KTB Investment 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 LG Uplus with a short position of KTB Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Uplus and KTB Investment.
Diversification Opportunities for LG Uplus and KTB Investment
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 032640 and KTB is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding LG Uplus and KTB Investment Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KTB Investment Securities and LG Uplus 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 LG Uplus are associated (or correlated) with KTB Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KTB Investment Securities has no effect on the direction of LG Uplus i.e., LG Uplus and KTB Investment go up and down completely randomly.
Pair Corralation between LG Uplus and KTB Investment
Assuming the 90 days trading horizon LG Uplus is expected to generate 0.62 times more return on investment than KTB Investment. However, LG Uplus is 1.62 times less risky than KTB Investment. It trades about 0.11 of its potential returns per unit of risk. KTB Investment Securities is currently generating about 0.0 per unit of risk. If you would invest 943,331 in LG Uplus on September 25, 2024 and sell it today you would earn a total of 152,669 from holding LG Uplus or generate 16.18% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 99.18% |
Values | Daily Returns |
LG Uplus vs. KTB Investment Securities
Performance |
Timeline |
LG Uplus |
KTB Investment Securities |
LG Uplus and KTB Investment Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with LG Uplus and KTB Investment
The main advantage of trading using opposite LG Uplus and KTB Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Uplus position performs unexpectedly, KTB Investment 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 KTB Investment will offset losses from the drop in KTB Investment's long position.LG Uplus vs. Samsung Electronics Co | LG Uplus vs. Samsung Electronics Co | LG Uplus vs. KB Financial Group | LG Uplus vs. Shinhan Financial Group |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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