Correlation Between Eagle Veterinary and LG Chemicals
Can any of the company-specific risk be diversified away by investing in both Eagle Veterinary and LG Chemicals 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 Eagle Veterinary and LG Chemicals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eagle Veterinary Technology and LG Chemicals, you can compare the effects of market volatilities on Eagle Veterinary and LG Chemicals 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 Eagle Veterinary with a short position of LG Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Veterinary and LG Chemicals.
Diversification Opportunities for Eagle Veterinary and LG Chemicals
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Eagle and 051910 is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Veterinary Technology and LG Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Chemicals and Eagle Veterinary 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 Eagle Veterinary Technology are associated (or correlated) with LG Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LG Chemicals has no effect on the direction of Eagle Veterinary i.e., Eagle Veterinary and LG Chemicals go up and down completely randomly.
Pair Corralation between Eagle Veterinary and LG Chemicals
Assuming the 90 days trading horizon Eagle Veterinary Technology is expected to generate 0.58 times more return on investment than LG Chemicals. However, Eagle Veterinary Technology is 1.71 times less risky than LG Chemicals. It trades about -0.04 of its potential returns per unit of risk. LG Chemicals is currently generating about -0.09 per unit of risk. If you would invest 502,000 in Eagle Veterinary Technology on September 3, 2024 and sell it today you would lose (18,500) from holding Eagle Veterinary Technology or give up 3.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eagle Veterinary Technology vs. LG Chemicals
Performance |
| Timeline |
| Eagle Veterinary Tec |
| LG Chemicals |
Eagle Veterinary and LG Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eagle Veterinary and LG Chemicals
The main advantage of trading using opposite Eagle Veterinary and LG Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Veterinary position performs unexpectedly, LG Chemicals 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 LG Chemicals will offset losses from the drop in LG Chemicals' long position.| Eagle Veterinary vs. Kolon Life Science | Eagle Veterinary vs. JETEMA Co | Eagle Veterinary vs. Aminologics CoLtd | Eagle Veterinary vs. Daihan Pharmaceutical CoLtd |
| LG Chemicals vs. Eagle Veterinary Technology | LG Chemicals vs. Daehan Synthetic Fiber | LG Chemicals vs. Chin Yang Chemical | LG Chemicals vs. Global Standard 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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