Correlation Between LG Uplus and Hyundai
Can any of the company-specific risk be diversified away by investing in both LG Uplus and Hyundai 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 LG Uplus and Hyundai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LG Uplus and Hyundai Motor Co, you can compare the effects of market volatilities on LG Uplus and Hyundai 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 LG Uplus with a short position of Hyundai. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Uplus and Hyundai.
Diversification Opportunities for LG Uplus and Hyundai
Very good diversification
The 3 months correlation between 032640 and Hyundai is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding LG Uplus and Hyundai Motor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Motor and LG Uplus 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 LG Uplus are associated (or correlated) with Hyundai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Motor has no effect on the direction of LG Uplus i.e., LG Uplus and Hyundai go up and down completely randomly.
Pair Corralation between LG Uplus and Hyundai
Assuming the 90 days trading horizon LG Uplus is expected to generate 0.69 times more return on investment than Hyundai. However, LG Uplus is 1.44 times less risky than Hyundai. It trades about 0.25 of its potential returns per unit of risk. Hyundai Motor Co is currently generating about -0.07 per unit of risk. If you would invest 976,000 in LG Uplus on September 4, 2024 and sell it today you would earn a total of 176,000 from holding LG Uplus or generate 18.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LG Uplus vs. Hyundai Motor Co
Performance |
| Timeline |
| LG Uplus |
| Hyundai Motor |
LG Uplus and Hyundai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG Uplus and Hyundai
The main advantage of trading using opposite LG Uplus and Hyundai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Uplus position performs unexpectedly, Hyundai 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 Hyundai will offset losses from the drop in Hyundai's long position.| LG Uplus vs. Jeju Semiconductor Corp | LG Uplus vs. LS Materials | LG Uplus vs. Union Materials Corp | LG Uplus vs. ABOV Semiconductor 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |