Correlation Between LG Uplus and ASTORY CoLtd
Can any of the company-specific risk be diversified away by investing in both LG Uplus and ASTORY CoLtd 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 ASTORY CoLtd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LG Uplus and ASTORY CoLtd, you can compare the effects of market volatilities on LG Uplus and ASTORY CoLtd 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 ASTORY CoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Uplus and ASTORY CoLtd.
Diversification Opportunities for LG Uplus and ASTORY CoLtd
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 032640 and ASTORY is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding LG Uplus and ASTORY CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASTORY CoLtd 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 ASTORY CoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASTORY CoLtd has no effect on the direction of LG Uplus i.e., LG Uplus and ASTORY CoLtd go up and down completely randomly.
Pair Corralation between LG Uplus and ASTORY CoLtd
Assuming the 90 days trading horizon LG Uplus is expected to generate 2.91 times less return on investment than ASTORY CoLtd. But when comparing it to its historical volatility, LG Uplus is 2.44 times less risky than ASTORY CoLtd. It trades about 0.16 of its potential returns per unit of risk. ASTORY CoLtd is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 693,000 in ASTORY CoLtd on September 12, 2024 and sell it today you would earn a total of 133,000 from holding ASTORY CoLtd or generate 19.19% 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. ASTORY CoLtd
Performance |
| Timeline |
| LG Uplus |
| ASTORY CoLtd |
LG Uplus and ASTORY CoLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG Uplus and ASTORY CoLtd
The main advantage of trading using opposite LG Uplus and ASTORY CoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Uplus position performs unexpectedly, ASTORY CoLtd 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 ASTORY CoLtd will offset losses from the drop in ASTORY CoLtd'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 |
| ASTORY CoLtd vs. Cube Entertainment | ASTORY CoLtd vs. PlayD Co | ASTORY CoLtd vs. Neungyule Education | ASTORY CoLtd vs. Solution Advanced Technology |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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