Correlation Between Playgram and LG Electronics
Can any of the company-specific risk be diversified away by investing in both Playgram and LG Electronics 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 Playgram and LG Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Playgram Co and LG Electronics, you can compare the effects of market volatilities on Playgram and LG Electronics 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 Playgram with a short position of LG Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playgram and LG Electronics.
Diversification Opportunities for Playgram and LG Electronics
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Playgram and 066570 is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Playgram Co and LG Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Electronics and Playgram 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 Playgram Co are associated (or correlated) with LG Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LG Electronics has no effect on the direction of Playgram i.e., Playgram and LG Electronics go up and down completely randomly.
Pair Corralation between Playgram and LG Electronics
Assuming the 90 days trading horizon Playgram Co is expected to generate 2.85 times more return on investment than LG Electronics. However, Playgram is 2.85 times more volatile than LG Electronics. It trades about 0.17 of its potential returns per unit of risk. LG Electronics is currently generating about -0.06 per unit of risk. If you would invest 31,100 in Playgram Co on October 16, 2024 and sell it today you would earn a total of 10,500 from holding Playgram Co or generate 33.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Playgram Co vs. LG Electronics
Performance |
| Timeline |
| Playgram |
| LG Electronics |
Playgram and LG Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Playgram and LG Electronics
The main advantage of trading using opposite Playgram and LG Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playgram position performs unexpectedly, LG Electronics 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 Electronics will offset losses from the drop in LG Electronics' long position.| Playgram vs. Songwon Industrial Co | Playgram vs. NICE Information Service | Playgram vs. Daou Data Corp | Playgram vs. Sam Yang Foods |
| LG Electronics vs. Shinhan Inverse Silver | LG Electronics vs. Hana Financial | LG Electronics vs. Shinhan Financial Group | LG Electronics vs. Digital Power Communications |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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