Correlation Between Pungguk Ethanol and LG Chemicals
Can any of the company-specific risk be diversified away by investing in both Pungguk Ethanol and LG Chemicals 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 Pungguk Ethanol and LG Chemicals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pungguk Ethanol Industrial and LG Chemicals, you can compare the effects of market volatilities on Pungguk Ethanol and LG Chemicals 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 Pungguk Ethanol with a short position of LG Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pungguk Ethanol and LG Chemicals.
Diversification Opportunities for Pungguk Ethanol and LG Chemicals
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Pungguk and 051910 is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Pungguk Ethanol Industrial and LG Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Chemicals and Pungguk Ethanol 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 Pungguk Ethanol Industrial are associated (or correlated) with LG Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LG Chemicals has no effect on the direction of Pungguk Ethanol i.e., Pungguk Ethanol and LG Chemicals go up and down completely randomly.
Pair Corralation between Pungguk Ethanol and LG Chemicals
Assuming the 90 days trading horizon Pungguk Ethanol Industrial is expected to generate 0.23 times more return on investment than LG Chemicals. However, Pungguk Ethanol Industrial is 4.42 times less risky than LG Chemicals. It trades about -0.24 of its potential returns per unit of risk. LG Chemicals is currently generating about -0.16 per unit of risk. If you would invest 1,008,000 in Pungguk Ethanol Industrial on August 28, 2024 and sell it today you would lose (31,000) from holding Pungguk Ethanol Industrial or give up 3.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pungguk Ethanol Industrial vs. LG Chemicals
Performance |
| Timeline |
| Pungguk Ethanol Indu |
| LG Chemicals |
Pungguk Ethanol and LG Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pungguk Ethanol and LG Chemicals
The main advantage of trading using opposite Pungguk Ethanol and LG Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pungguk Ethanol position performs unexpectedly, LG Chemicals 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 Chemicals will offset losses from the drop in LG Chemicals' long position.| Pungguk Ethanol vs. AptaBio Therapeutics | Pungguk Ethanol vs. Daewoo SBI SPAC | Pungguk Ethanol vs. Dream Security co | Pungguk Ethanol vs. Microfriend |
| LG Chemicals vs. Hyundai Industrial Co | LG Chemicals vs. Songwon Industrial Co | LG Chemicals vs. Daiyang Metal Co | LG Chemicals vs. Pungguk Ethanol Industrial |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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