Correlation Between LG Uplus and GeneBioTech
Can any of the company-specific risk be diversified away by investing in both LG Uplus and GeneBioTech 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 GeneBioTech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LG Uplus and GeneBioTech Co, you can compare the effects of market volatilities on LG Uplus and GeneBioTech 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 GeneBioTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Uplus and GeneBioTech.
Diversification Opportunities for LG Uplus and GeneBioTech
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 032640 and GeneBioTech is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding LG Uplus and GeneBioTech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GeneBioTech 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 GeneBioTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GeneBioTech has no effect on the direction of LG Uplus i.e., LG Uplus and GeneBioTech go up and down completely randomly.
Pair Corralation between LG Uplus and GeneBioTech
Assuming the 90 days trading horizon LG Uplus is expected to generate 0.52 times more return on investment than GeneBioTech. However, LG Uplus is 1.93 times less risky than GeneBioTech. It trades about 0.03 of its potential returns per unit of risk. GeneBioTech Co is currently generating about -0.01 per unit of risk. If you would invest 985,044 in LG Uplus on September 22, 2024 and sell it today you would earn a total of 103,956 from holding LG Uplus or generate 10.55% 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. GeneBioTech Co
Performance |
| Timeline |
| LG Uplus |
| GeneBioTech |
LG Uplus and GeneBioTech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG Uplus and GeneBioTech
The main advantage of trading using opposite LG Uplus and GeneBioTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Uplus position performs unexpectedly, GeneBioTech 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 GeneBioTech will offset losses from the drop in GeneBioTech's long position.| LG Uplus vs. Samsung Electronics Co | LG Uplus vs. Samsung Electronics Co | LG Uplus vs. KB Financial Group | LG Uplus vs. Shinhan Financial Group |
| GeneBioTech vs. Bookook Steel | GeneBioTech vs. Koryo Credit Information | GeneBioTech vs. Moadata Co | GeneBioTech vs. Jeong Moon Information |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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