Correlation Between LG Uplus and 311960
Can any of the company-specific risk be diversified away by investing in both LG Uplus and 311960 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 311960 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LG Uplus and 311960, you can compare the effects of market volatilities on LG Uplus and 311960 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 311960. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Uplus and 311960.
Diversification Opportunities for LG Uplus and 311960
Poor diversification
The 3 months correlation between 032640 and 311960 is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding LG Uplus and 311960 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 311960 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 311960. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 311960 has no effect on the direction of LG Uplus i.e., LG Uplus and 311960 go up and down completely randomly.
Pair Corralation between LG Uplus and 311960
Assuming the 90 days trading horizon LG Uplus is expected to generate 0.2 times more return on investment than 311960. However, LG Uplus is 5.03 times less risky than 311960. It trades about 0.02 of its potential returns per unit of risk. 311960 is currently generating about -0.04 per unit of risk. If you would invest 1,007,952 in LG Uplus on September 26, 2024 and sell it today you would earn a total of 91,048 from holding LG Uplus or generate 9.03% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 99.79% |
Values | Daily Returns |
LG Uplus vs. 311960
Performance |
Timeline |
LG Uplus |
311960 |
LG Uplus and 311960 Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with LG Uplus and 311960
The main advantage of trading using opposite LG Uplus and 311960 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Uplus position performs unexpectedly, 311960 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 311960 will offset losses from the drop in 311960'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 |
311960 vs. Samsung Electronics Co | 311960 vs. Samsung Electronics Co | 311960 vs. LG Energy Solution | 311960 vs. SK Hynix |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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