Correlation Between Songwon Industrial and LG Uplus
Can any of the company-specific risk be diversified away by investing in both Songwon Industrial and LG Uplus 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 Songwon Industrial and LG Uplus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Songwon Industrial Co and LG Uplus, you can compare the effects of market volatilities on Songwon Industrial and LG Uplus 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 Songwon Industrial with a short position of LG Uplus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Songwon Industrial and LG Uplus.
Diversification Opportunities for Songwon Industrial and LG Uplus
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Songwon and 032640 is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Songwon Industrial Co and LG Uplus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Uplus and Songwon 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 Songwon Industrial Co are associated (or correlated) with LG Uplus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LG Uplus has no effect on the direction of Songwon Industrial i.e., Songwon Industrial and LG Uplus go up and down completely randomly.
Pair Corralation between Songwon Industrial and LG Uplus
Assuming the 90 days trading horizon Songwon Industrial Co is expected to generate 2.08 times more return on investment than LG Uplus. However, Songwon Industrial is 2.08 times more volatile than LG Uplus. It trades about 0.24 of its potential returns per unit of risk. LG Uplus is currently generating about -0.39 per unit of risk. If you would invest 1,121,000 in Songwon Industrial Co on October 24, 2024 and sell it today you would earn a total of 130,000 from holding Songwon Industrial Co or generate 11.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Songwon Industrial Co vs. LG Uplus
Performance |
| Timeline |
| Songwon Industrial |
| LG Uplus |
Songwon Industrial and LG Uplus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Songwon Industrial and LG Uplus
The main advantage of trading using opposite Songwon Industrial and LG Uplus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Songwon Industrial position performs unexpectedly, LG Uplus 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 Uplus will offset losses from the drop in LG Uplus' long position.| Songwon Industrial vs. AptaBio Therapeutics | Songwon Industrial vs. Daewoo SBI SPAC | Songwon Industrial vs. Dream Security co | Songwon Industrial vs. Microfriend |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |