Correlation Between LG Uplus and AnterogenCoLtd
Can any of the company-specific risk be diversified away by investing in both LG Uplus and AnterogenCoLtd 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 AnterogenCoLtd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LG Uplus and AnterogenCoLtd, you can compare the effects of market volatilities on LG Uplus and AnterogenCoLtd 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 AnterogenCoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Uplus and AnterogenCoLtd.
Diversification Opportunities for LG Uplus and AnterogenCoLtd
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 032640 and AnterogenCoLtd is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding LG Uplus and AnterogenCoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AnterogenCoLtd 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 AnterogenCoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AnterogenCoLtd has no effect on the direction of LG Uplus i.e., LG Uplus and AnterogenCoLtd go up and down completely randomly.
Pair Corralation between LG Uplus and AnterogenCoLtd
Assuming the 90 days trading horizon LG Uplus is expected to generate 1.74 times less return on investment than AnterogenCoLtd. But when comparing it to its historical volatility, LG Uplus is 2.25 times less risky than AnterogenCoLtd. It trades about 0.16 of its potential returns per unit of risk. AnterogenCoLtd is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,508,000 in AnterogenCoLtd on September 12, 2024 and sell it today you would earn a total of 159,000 from holding AnterogenCoLtd or generate 10.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LG Uplus vs. AnterogenCoLtd
Performance |
| Timeline |
| LG Uplus |
| AnterogenCoLtd |
LG Uplus and AnterogenCoLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG Uplus and AnterogenCoLtd
The main advantage of trading using opposite LG Uplus and AnterogenCoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Uplus position performs unexpectedly, AnterogenCoLtd 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 AnterogenCoLtd will offset losses from the drop in AnterogenCoLtd's long position.| 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |