Correlation Between LG Innotek and Hyundai Glovis
Can any of the company-specific risk be diversified away by investing in both LG Innotek and Hyundai Glovis 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 Glovis 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 Glovis, you can compare the effects of market volatilities on LG Innotek and Hyundai Glovis 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 Glovis. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Innotek and Hyundai Glovis.
Diversification Opportunities for LG Innotek and Hyundai Glovis
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 011070 and Hyundai is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding LG Innotek Co and Hyundai Glovis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Glovis 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 Glovis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Glovis has no effect on the direction of LG Innotek i.e., LG Innotek and Hyundai Glovis go up and down completely randomly.
Pair Corralation between LG Innotek and Hyundai Glovis
Assuming the 90 days trading horizon LG Innotek Co is expected to under-perform the Hyundai Glovis. In addition to that, LG Innotek is 1.23 times more volatile than Hyundai Glovis. It trades about -0.03 of its total potential returns per unit of risk. Hyundai Glovis is currently generating about 0.08 per unit of volatility. If you would invest 7,564,075 in Hyundai Glovis on November 27, 2024 and sell it today you would earn a total of 6,545,925 from holding Hyundai Glovis or generate 86.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.78% |
| Values | Daily Returns |
LG Innotek Co vs. Hyundai Glovis
Performance |
| Timeline |
| LG Innotek |
| Hyundai Glovis |
LG Innotek and Hyundai Glovis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG Innotek and Hyundai Glovis
The main advantage of trading using opposite LG Innotek and Hyundai Glovis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Innotek position performs unexpectedly, Hyundai Glovis 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 Glovis will offset losses from the drop in Hyundai Glovis' long position.| LG Innotek vs. Samick Musical Instruments | LG Innotek vs. AeroSpace Technology of | LG Innotek vs. BGF Retail Co | LG Innotek vs. Genie Music |
| Hyundai Glovis vs. Dongkuk Structures Construction | Hyundai Glovis vs. Korea Steel Co | Hyundai Glovis vs. Samlip General Foods | Hyundai Glovis vs. GS Engineering Construction |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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