Correlation Between Daesung Private and LG Uplus
Can any of the company-specific risk be diversified away by investing in both Daesung Private 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 Daesung Private and LG Uplus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daesung Private Equity and LG Uplus, you can compare the effects of market volatilities on Daesung Private 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 Daesung Private with a short position of LG Uplus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daesung Private and LG Uplus.
Diversification Opportunities for Daesung Private and LG Uplus
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Daesung and 032640 is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Daesung Private Equity and LG Uplus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Uplus and Daesung Private 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 Daesung Private Equity 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 Daesung Private i.e., Daesung Private and LG Uplus go up and down completely randomly.
Pair Corralation between Daesung Private and LG Uplus
Assuming the 90 days trading horizon Daesung Private Equity is expected to generate 2.49 times more return on investment than LG Uplus. However, Daesung Private is 2.49 times more volatile than LG Uplus. It trades about 0.15 of its potential returns per unit of risk. LG Uplus is currently generating about -0.27 per unit of risk. If you would invest 183,400 in Daesung Private Equity on October 21, 2024 and sell it today you would earn a total of 12,700 from holding Daesung Private Equity or generate 6.92% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Daesung Private Equity vs. LG Uplus
Performance |
Timeline |
Daesung Private Equity |
LG Uplus |
Daesung Private and LG Uplus Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Daesung Private and LG Uplus
The main advantage of trading using opposite Daesung Private and LG Uplus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daesung Private 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.Daesung Private vs. Korea New Network | Daesung Private vs. ICD Co | Daesung Private vs. DYPNF CoLtd | Daesung Private vs. Busan Industrial Co |
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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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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