Correlation Between Camus Engineering and LG Household
Can any of the company-specific risk be diversified away by investing in both Camus Engineering 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 Camus Engineering and LG Household into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Camus Engineering Construction and LG Household Healthcare, you can compare the effects of market volatilities on Camus Engineering 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 Camus Engineering with a short position of LG Household. Check out your portfolio center. Please also check ongoing floating volatility patterns of Camus Engineering and LG Household.
Diversification Opportunities for Camus Engineering and LG Household
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Camus and 051905 is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Camus Engineering Construction 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 Camus Engineering 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 Camus Engineering Construction 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 Camus Engineering i.e., Camus Engineering and LG Household go up and down completely randomly.
Pair Corralation between Camus Engineering and LG Household
Assuming the 90 days trading horizon Camus Engineering Construction is expected to under-perform the LG Household. In addition to that, Camus Engineering is 1.43 times more volatile than LG Household Healthcare. It trades about -0.09 of its total potential returns per unit of risk. LG Household Healthcare is currently generating about -0.08 per unit of volatility. If you would invest 12,980,000 in LG Household Healthcare on November 28, 2024 and sell it today you would lose (320,000) from holding LG Household Healthcare or give up 2.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Camus Engineering Construction vs. LG Household Healthcare
Performance |
| Timeline |
| Camus Engineering |
| LG Household Healthcare |
Camus Engineering and LG Household Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Camus Engineering and LG Household
The main advantage of trading using opposite Camus Engineering and LG Household positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Camus Engineering 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.| Camus Engineering vs. Kumho Petro Chemical | Camus Engineering vs. Hannong Chemicals | Camus Engineering vs. Silicon2 Co | Camus Engineering vs. Guyoung Technology Co |
| LG Household vs. DC Media Co | LG Household vs. FNC Entertainment Co | LG Household vs. Golden Bridge Investment | LG Household vs. SV Investment |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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