Correlation Between LG Uplus and Hanilcmt
Can any of the company-specific risk be diversified away by investing in both LG Uplus and Hanilcmt 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 Hanilcmt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LG Uplus and Hanilcmt Co, you can compare the effects of market volatilities on LG Uplus and Hanilcmt 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 Hanilcmt. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Uplus and Hanilcmt.
Diversification Opportunities for LG Uplus and Hanilcmt
Weak diversification
The 3 months correlation between 032640 and Hanilcmt is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding LG Uplus and Hanilcmt Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanilcmt 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 Hanilcmt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanilcmt has no effect on the direction of LG Uplus i.e., LG Uplus and Hanilcmt go up and down completely randomly.
Pair Corralation between LG Uplus and Hanilcmt
Assuming the 90 days trading horizon LG Uplus is expected to generate 0.79 times more return on investment than Hanilcmt. However, LG Uplus is 1.27 times less risky than Hanilcmt. It trades about 0.16 of its potential returns per unit of risk. Hanilcmt Co is currently generating about 0.1 per unit of risk. If you would invest 1,011,000 in LG Uplus on September 12, 2024 and sell it today you would earn a total of 67,000 from holding LG Uplus or generate 6.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LG Uplus vs. Hanilcmt Co
Performance |
| Timeline |
| LG Uplus |
| Hanilcmt |
LG Uplus and Hanilcmt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG Uplus and Hanilcmt
The main advantage of trading using opposite LG Uplus and Hanilcmt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Uplus position performs unexpectedly, Hanilcmt 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 Hanilcmt will offset losses from the drop in Hanilcmt'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 |
| Hanilcmt vs. Solution Advanced Technology | Hanilcmt vs. Korea Shipbuilding Offshore | Hanilcmt vs. Shinhan Financial Group | Hanilcmt vs. Settlebank |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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