Correlation Between LG Uplus and Sang A
Can any of the company-specific risk be diversified away by investing in both LG Uplus and Sang A 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 Sang A into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LG Uplus and Sang A Frontec CoLtd, you can compare the effects of market volatilities on LG Uplus and Sang A 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 Sang A. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Uplus and Sang A.
Diversification Opportunities for LG Uplus and Sang A
Excellent diversification
The 3 months correlation between 032640 and Sang is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding LG Uplus and Sang A Frontec CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sang A Frontec 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 Sang A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sang A Frontec has no effect on the direction of LG Uplus i.e., LG Uplus and Sang A go up and down completely randomly.
Pair Corralation between LG Uplus and Sang A
Assuming the 90 days trading horizon LG Uplus is expected to generate 12.72 times less return on investment than Sang A. But when comparing it to its historical volatility, LG Uplus is 1.83 times less risky than Sang A. It trades about 0.01 of its potential returns per unit of risk. Sang A Frontec CoLtd is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,832,000 in Sang A Frontec CoLtd on September 22, 2024 and sell it today you would earn a total of 78,000 from holding Sang A Frontec CoLtd or generate 4.26% 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. Sang A Frontec CoLtd
Performance |
| Timeline |
| LG Uplus |
| Sang A Frontec |
LG Uplus and Sang A Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG Uplus and Sang A
The main advantage of trading using opposite LG Uplus and Sang A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Uplus position performs unexpectedly, Sang A 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 Sang A will offset losses from the drop in Sang A's long position.The idea behind LG Uplus and Sang A Frontec CoLtd pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Sang A vs. Pureun Mutual Savings | Sang A vs. Dgb Financial | Sang A vs. Jeju Bank | Sang A vs. Daishin Information Communications |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |