Correlation Between Kbi Metal and LG Uplus
Can any of the company-specific risk be diversified away by investing in both Kbi Metal 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 Kbi Metal and LG Uplus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kbi Metal Co and LG Uplus, you can compare the effects of market volatilities on Kbi Metal 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 Kbi Metal with a short position of LG Uplus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kbi Metal and LG Uplus.
Diversification Opportunities for Kbi Metal and LG Uplus
Pay attention - limited upside
The 3 months correlation between Kbi and 032640 is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Kbi Metal Co and LG Uplus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Uplus and Kbi Metal 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 Kbi Metal 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 Kbi Metal i.e., Kbi Metal and LG Uplus go up and down completely randomly.
Pair Corralation between Kbi Metal and LG Uplus
Assuming the 90 days trading horizon Kbi Metal Co is expected to under-perform the LG Uplus. In addition to that, Kbi Metal is 2.72 times more volatile than LG Uplus. It trades about -0.26 of its total potential returns per unit of risk. LG Uplus is currently generating about 0.16 per unit of volatility. If you would invest 1,011,000 in LG Uplus on September 12, 2024 and sell it today you would earn a total of 67,000 from holding LG Uplus or generate 6.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Kbi Metal Co vs. LG Uplus
Performance |
| Timeline |
| Kbi Metal |
| LG Uplus |
Kbi Metal and LG Uplus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kbi Metal and LG Uplus
The main advantage of trading using opposite Kbi Metal and LG Uplus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kbi Metal 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.| Kbi Metal vs. Daejung Chemicals Metals | Kbi Metal vs. Dongbang Transport Logistics | Kbi Metal vs. Hankook Furniture Co | Kbi Metal vs. Home Center Holdings |
| LG Uplus vs. Kbi Metal Co | LG Uplus vs. Pungguk Ethanol Industrial | LG Uplus vs. DONGKUK TED METAL | LG Uplus vs. Hanjin Transportation 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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