Correlation Between LG Uplus and Genic
Can any of the company-specific risk be diversified away by investing in both LG Uplus and Genic 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 Genic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LG Uplus and Genic Co, you can compare the effects of market volatilities on LG Uplus and Genic 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 Genic. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Uplus and Genic.
Diversification Opportunities for LG Uplus and Genic
Very good diversification
The 3 months correlation between 032640 and Genic is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding LG Uplus and Genic Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genic 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 Genic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genic has no effect on the direction of LG Uplus i.e., LG Uplus and Genic go up and down completely randomly.
Pair Corralation between LG Uplus and Genic
Assuming the 90 days trading horizon LG Uplus is expected to under-perform the Genic. But the stock apears to be less risky and, when comparing its historical volatility, LG Uplus is 3.57 times less risky than Genic. The stock trades about -0.15 of its potential returns per unit of risk. The Genic Co is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 1,934,000 in Genic Co on October 13, 2024 and sell it today you would earn a total of 781,000 from holding Genic Co or generate 40.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
LG Uplus vs. Genic Co
Performance |
| Timeline |
| LG Uplus |
| Genic |
LG Uplus and Genic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG Uplus and Genic
The main advantage of trading using opposite LG Uplus and Genic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Uplus position performs unexpectedly, Genic 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 Genic will offset losses from the drop in Genic's long position.| LG Uplus vs. Guyoung Technology Co | LG Uplus vs. Kyung In Synthetic Corp | LG Uplus vs. KG Eco Technology | LG Uplus vs. Hyundai Home Shopping |
| Genic vs. Nh Investment And | Genic vs. DB Financial Investment | Genic vs. Korean Drug Co | Genic vs. NH Investment Securities |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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