Correlation Between Sangsangin Investment and LG Chemicals
Can any of the company-specific risk be diversified away by investing in both Sangsangin Investment and LG Chemicals 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 Sangsangin Investment and LG Chemicals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sangsangin Investment Securities and LG Chemicals, you can compare the effects of market volatilities on Sangsangin Investment and LG Chemicals 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 Sangsangin Investment with a short position of LG Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sangsangin Investment and LG Chemicals.
Diversification Opportunities for Sangsangin Investment and LG Chemicals
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sangsangin and 051910 is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Sangsangin Investment Securiti and LG Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Chemicals and Sangsangin Investment 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 Sangsangin Investment Securities are associated (or correlated) with LG Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LG Chemicals has no effect on the direction of Sangsangin Investment i.e., Sangsangin Investment and LG Chemicals go up and down completely randomly.
Pair Corralation between Sangsangin Investment and LG Chemicals
Assuming the 90 days trading horizon Sangsangin Investment Securities is expected to generate 0.54 times more return on investment than LG Chemicals. However, Sangsangin Investment Securities is 1.84 times less risky than LG Chemicals. It trades about 0.04 of its potential returns per unit of risk. LG Chemicals is currently generating about -0.24 per unit of risk. If you would invest 42,600 in Sangsangin Investment Securities on October 17, 2024 and sell it today you would earn a total of 300.00 from holding Sangsangin Investment Securities or generate 0.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sangsangin Investment Securiti vs. LG Chemicals
Performance |
| Timeline |
| Sangsangin Investment |
| LG Chemicals |
Sangsangin Investment and LG Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sangsangin Investment and LG Chemicals
The main advantage of trading using opposite Sangsangin Investment and LG Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sangsangin Investment position performs unexpectedly, LG Chemicals 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 LG Chemicals will offset losses from the drop in LG Chemicals' long position.| Sangsangin Investment vs. Hankukpackage Co | Sangsangin Investment vs. Camus Engineering Construction | Sangsangin Investment vs. Dongkuk Structures Construction | Sangsangin Investment vs. Daelim Trading Co |
| LG Chemicals vs. E Investment Development | LG Chemicals vs. Daol Investment Securities | LG Chemicals vs. Golden Bridge Investment | LG Chemicals vs. Sangsangin Investment Securities |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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