Correlation Between Kyung In and LG Uplus

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Can any of the company-specific risk be diversified away by investing in both Kyung In and LG Uplus 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 Kyung In and LG Uplus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kyung In Synthetic Corp and LG Uplus, you can compare the effects of market volatilities on Kyung In and LG Uplus 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 Kyung In with a short position of LG Uplus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kyung In and LG Uplus.

Diversification Opportunities for Kyung In and LG Uplus

-0.48
  Correlation Coefficient

Very good diversification

The 3 months correlation between Kyung and 032640 is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Kyung In Synthetic Corp and LG Uplus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Uplus and Kyung In 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 Kyung In Synthetic Corp are associated (or correlated) with LG Uplus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LG Uplus has no effect on the direction of Kyung In i.e., Kyung In and LG Uplus go up and down completely randomly.

Pair Corralation between Kyung In and LG Uplus

Assuming the 90 days trading horizon Kyung In Synthetic Corp is expected to under-perform the LG Uplus. In addition to that, Kyung In is 1.94 times more volatile than LG Uplus. It trades about -0.03 of its total potential returns per unit of risk. LG Uplus is currently generating about 0.01 per unit of volatility. If you would invest  1,028,111  in LG Uplus on October 13, 2024 and sell it today you would earn a total of  16,889  from holding LG Uplus or generate 1.64% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy99.79%
ValuesDaily Returns

Kyung In Synthetic Corp  vs.  LG Uplus

 Performance 
       Timeline  
Kyung In Synthetic 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Kyung In Synthetic Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Kyung In is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
LG Uplus 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in LG Uplus are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, LG Uplus may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Kyung In and LG Uplus Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Kyung In and LG Uplus

The main advantage of trading using opposite Kyung In and LG Uplus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kyung In position performs unexpectedly, LG Uplus 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 Uplus will offset losses from the drop in LG Uplus' long position.
The idea behind Kyung In Synthetic Corp and LG Uplus pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.

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