Correlation Between LG Innotek and Hyundai Elevator
Can any of the company-specific risk be diversified away by investing in both LG Innotek and Hyundai Elevator 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 LG Innotek and Hyundai Elevator into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LG Innotek Co and Hyundai Elevator, you can compare the effects of market volatilities on LG Innotek and Hyundai Elevator 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 LG Innotek with a short position of Hyundai Elevator. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Innotek and Hyundai Elevator.
Diversification Opportunities for LG Innotek and Hyundai Elevator
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between 011070 and Hyundai is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding LG Innotek Co and Hyundai Elevator in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Elevator and LG Innotek 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 LG Innotek Co are associated (or correlated) with Hyundai Elevator. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Elevator has no effect on the direction of LG Innotek i.e., LG Innotek and Hyundai Elevator go up and down completely randomly.
Pair Corralation between LG Innotek and Hyundai Elevator
Assuming the 90 days trading horizon LG Innotek Co is expected to generate 1.05 times more return on investment than Hyundai Elevator. However, LG Innotek is 1.05 times more volatile than Hyundai Elevator. It trades about 0.2 of its potential returns per unit of risk. Hyundai Elevator is currently generating about 0.1 per unit of risk. If you would invest 14,870,000 in LG Innotek Co on November 28, 2024 and sell it today you would earn a total of 1,290,000 from holding LG Innotek Co or generate 8.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LG Innotek Co vs. Hyundai Elevator
Performance |
| Timeline |
| LG Innotek |
| Hyundai Elevator |
LG Innotek and Hyundai Elevator Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG Innotek and Hyundai Elevator
The main advantage of trading using opposite LG Innotek and Hyundai Elevator positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Innotek position performs unexpectedly, Hyundai Elevator 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 Hyundai Elevator will offset losses from the drop in Hyundai Elevator's long position.| LG Innotek vs. Sam Yang Foods | LG Innotek vs. InfoBank | LG Innotek vs. LG Household Healthcare | LG Innotek vs. Automobile Pc |
| Hyundai Elevator vs. Fine Besteel Co | Hyundai Elevator vs. Aprogen Healthcare Games | Hyundai Elevator vs. Hironic Co | Hyundai Elevator vs. Hyundai BNG Steel |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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