Correlation Between Youl Chon and LG Household
Can any of the company-specific risk be diversified away by investing in both Youl Chon 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 Youl Chon and LG Household into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Youl Chon Chemical and LG Household Healthcare, you can compare the effects of market volatilities on Youl Chon 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 Youl Chon with a short position of LG Household. Check out your portfolio center. Please also check ongoing floating volatility patterns of Youl Chon and LG Household.
Diversification Opportunities for Youl Chon and LG Household
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Youl and 051900 is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Youl Chon Chemical 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 Youl Chon 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 Youl Chon Chemical 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 Youl Chon i.e., Youl Chon and LG Household go up and down completely randomly.
Pair Corralation between Youl Chon and LG Household
Assuming the 90 days trading horizon Youl Chon Chemical is expected to under-perform the LG Household. In addition to that, Youl Chon is 1.57 times more volatile than LG Household Healthcare. It trades about -0.02 of its total potential returns per unit of risk. LG Household Healthcare is currently generating about 0.01 per unit of volatility. If you would invest 33,150,000 in LG Household Healthcare on August 25, 2024 and sell it today you would lose (600,000) from holding LG Household Healthcare or give up 1.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Youl Chon Chemical vs. LG Household Healthcare
Performance |
| Timeline |
| Youl Chon Chemical |
| LG Household Healthcare |
Youl Chon and LG Household Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Youl Chon and LG Household
The main advantage of trading using opposite Youl Chon and LG Household positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Youl Chon 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.| Youl Chon vs. AptaBio Therapeutics | Youl Chon vs. Daewoo SBI SPAC | Youl Chon vs. Dream Security co | Youl Chon vs. Microfriend |
| LG Household vs. AptaBio Therapeutics | LG Household vs. Daewoo SBI SPAC | LG Household vs. Dream Security co | LG Household 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |