Correlation Between Hwangkum Steel and LG Energy
Can any of the company-specific risk be diversified away by investing in both Hwangkum Steel and LG Energy 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 Hwangkum Steel and LG Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hwangkum Steel Technology and LG Energy Solution, you can compare the effects of market volatilities on Hwangkum Steel and LG Energy 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 Hwangkum Steel with a short position of LG Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hwangkum Steel and LG Energy.
Diversification Opportunities for Hwangkum Steel and LG Energy
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hwangkum and 373220 is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Hwangkum Steel Technology and LG Energy Solution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Energy Solution and Hwangkum 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 Hwangkum Steel Technology are associated (or correlated) with LG Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LG Energy Solution has no effect on the direction of Hwangkum Steel i.e., Hwangkum Steel and LG Energy go up and down completely randomly.
Pair Corralation between Hwangkum Steel and LG Energy
Assuming the 90 days trading horizon Hwangkum Steel Technology is expected to generate 0.24 times more return on investment than LG Energy. However, Hwangkum Steel Technology is 4.1 times less risky than LG Energy. It trades about 0.43 of its potential returns per unit of risk. LG Energy Solution is currently generating about -0.01 per unit of risk. If you would invest 472,592 in Hwangkum Steel Technology on October 24, 2024 and sell it today you would earn a total of 23,908 from holding Hwangkum Steel Technology or generate 5.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hwangkum Steel Technology vs. LG Energy Solution
Performance |
| Timeline |
| Hwangkum Steel Technology |
| LG Energy Solution |
Hwangkum Steel and LG Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hwangkum Steel and LG Energy
The main advantage of trading using opposite Hwangkum Steel and LG Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hwangkum Steel position performs unexpectedly, LG Energy 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 Energy will offset losses from the drop in LG Energy's long position.| Hwangkum Steel vs. PJ Metal Co | Hwangkum Steel vs. Aprogen Healthcare Games | Hwangkum Steel vs. LG Display Co | Hwangkum Steel vs. Lotte Data Communication |
| LG Energy vs. Hwangkum Steel Technology | LG Energy vs. EBEST Investment Securities | LG Energy vs. Samyung Trading Co | LG Energy vs. Pureun Mutual Savings |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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