Correlation Between LG Electronics and TIANQI LITHIUM
Can any of the company-specific risk be diversified away by investing in both LG Electronics and TIANQI LITHIUM 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 Electronics and TIANQI LITHIUM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LG Electronics and TIANQI LITHIUM H, you can compare the effects of market volatilities on LG Electronics and TIANQI LITHIUM 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 Electronics with a short position of TIANQI LITHIUM. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Electronics and TIANQI LITHIUM.
Diversification Opportunities for LG Electronics and TIANQI LITHIUM
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between LGLG and TIANQI is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding LG Electronics and TIANQI LITHIUM H in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TIANQI LITHIUM H and LG Electronics 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 Electronics are associated (or correlated) with TIANQI LITHIUM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TIANQI LITHIUM H has no effect on the direction of LG Electronics i.e., LG Electronics and TIANQI LITHIUM go up and down completely randomly.
Pair Corralation between LG Electronics and TIANQI LITHIUM
Assuming the 90 days trading horizon LG Electronics is expected to under-perform the TIANQI LITHIUM. But the stock apears to be less risky and, when comparing its historical volatility, LG Electronics is 2.84 times less risky than TIANQI LITHIUM. The stock trades about -0.07 of its potential returns per unit of risk. The TIANQI LITHIUM H is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 216.00 in TIANQI LITHIUM H on September 15, 2024 and sell it today you would earn a total of 84.00 from holding TIANQI LITHIUM H or generate 38.89% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
LG Electronics vs. TIANQI LITHIUM H
Performance |
Timeline |
LG Electronics |
TIANQI LITHIUM H |
LG Electronics and TIANQI LITHIUM Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with LG Electronics and TIANQI LITHIUM
The main advantage of trading using opposite LG Electronics and TIANQI LITHIUM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Electronics position performs unexpectedly, TIANQI LITHIUM 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 TIANQI LITHIUM will offset losses from the drop in TIANQI LITHIUM's long position.LG Electronics vs. Samsung Electronics Co | LG Electronics vs. Sony Group | LG Electronics vs. Superior Plus Corp | LG Electronics vs. SIVERS SEMICONDUCTORS AB |
TIANQI LITHIUM vs. DIVERSIFIED ROYALTY | TIANQI LITHIUM vs. Strategic Investments AS | TIANQI LITHIUM vs. CarsalesCom | TIANQI LITHIUM vs. Cars Inc |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
Money Managers Screen money managers from public funds and ETFs managed around the world | |
Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |