Correlation Between Daeduck Electronics and LG Household
Can any of the company-specific risk be diversified away by investing in both Daeduck Electronics and LG Household 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 Daeduck Electronics and LG Household into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daeduck Electronics Co and LG Household Healthcare, you can compare the effects of market volatilities on Daeduck Electronics and LG Household 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 Daeduck Electronics with a short position of LG Household. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daeduck Electronics and LG Household.
Diversification Opportunities for Daeduck Electronics and LG Household
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Daeduck and 051905 is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Daeduck Electronics Co and LG Household Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Household Healthcare and Daeduck 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 Daeduck Electronics Co are associated (or correlated) with LG Household. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LG Household Healthcare has no effect on the direction of Daeduck Electronics i.e., Daeduck Electronics and LG Household go up and down completely randomly.
Pair Corralation between Daeduck Electronics and LG Household
Assuming the 90 days trading horizon Daeduck Electronics Co is expected to generate 0.78 times more return on investment than LG Household. However, Daeduck Electronics Co is 1.28 times less risky than LG Household. It trades about 0.12 of its potential returns per unit of risk. LG Household Healthcare is currently generating about -0.46 per unit of risk. If you would invest 672,000 in Daeduck Electronics Co on October 24, 2024 and sell it today you would earn a total of 10,000 from holding Daeduck Electronics Co or generate 1.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daeduck Electronics Co vs. LG Household Healthcare
Performance |
| Timeline |
| Daeduck Electronics |
| LG Household Healthcare |
Daeduck Electronics and LG Household Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daeduck Electronics and LG Household
The main advantage of trading using opposite Daeduck Electronics and LG Household positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daeduck Electronics position performs unexpectedly, LG Household 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 Household will offset losses from the drop in LG Household's long position.| Daeduck Electronics vs. Tway Air Co | Daeduck Electronics vs. Air Busan Co | Daeduck Electronics vs. Samick Musical Instruments | Daeduck Electronics vs. Cube Entertainment |
| LG Household vs. Samji Electronics Co | LG Household vs. Daeduck Electronics Co | LG Household vs. PJ Electronics Co | LG Household vs. Daejoo Electronic Materials |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |