Correlation Between Samhyun Steel and LG Uplus
Can any of the company-specific risk be diversified away by investing in both Samhyun Steel 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 Samhyun Steel and LG Uplus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samhyun Steel Co and LG Uplus, you can compare the effects of market volatilities on Samhyun Steel 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 Samhyun Steel with a short position of LG Uplus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samhyun Steel and LG Uplus.
Diversification Opportunities for Samhyun Steel and LG Uplus
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Samhyun and 032640 is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Samhyun Steel Co and LG Uplus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Uplus and Samhyun Steel 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 Samhyun Steel Co 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 Samhyun Steel i.e., Samhyun Steel and LG Uplus go up and down completely randomly.
Pair Corralation between Samhyun Steel and LG Uplus
Assuming the 90 days trading horizon Samhyun Steel is expected to generate 1.33 times less return on investment than LG Uplus. But when comparing it to its historical volatility, Samhyun Steel Co is 1.31 times less risky than LG Uplus. It trades about 0.23 of its potential returns per unit of risk. LG Uplus is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 1,000,000 in LG Uplus on September 15, 2024 and sell it today you would earn a total of 95,000 from holding LG Uplus or generate 9.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Samhyun Steel Co vs. LG Uplus
Performance |
| Timeline |
| Samhyun Steel |
| LG Uplus |
Samhyun Steel and LG Uplus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samhyun Steel and LG Uplus
The main advantage of trading using opposite Samhyun Steel and LG Uplus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samhyun Steel 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.| Samhyun Steel vs. Keum Kang Steel | Samhyun Steel vs. Gyeongnam Steel Co | Samhyun Steel vs. Wonil Special Steel |
| LG Uplus vs. KIWI Media Group | LG Uplus vs. Samhyun Steel Co | LG Uplus vs. Bookook Steel | LG Uplus vs. SAMG Entertainment Co |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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