Correlation Between INtRON Biotechnology and LG Household
Can any of the company-specific risk be diversified away by investing in both INtRON Biotechnology and LG Household 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 INtRON Biotechnology and LG Household into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iNtRON Biotechnology and LG Household Healthcare, you can compare the effects of market volatilities on INtRON Biotechnology and LG Household 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 INtRON Biotechnology with a short position of LG Household. Check out your portfolio center. Please also check ongoing floating volatility patterns of INtRON Biotechnology and LG Household.
Diversification Opportunities for INtRON Biotechnology and LG Household
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between INtRON and 051905 is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding iNtRON Biotechnology and LG Household Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Household Healthcare and INtRON Biotechnology 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 iNtRON Biotechnology are associated (or correlated) with LG Household. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LG Household Healthcare has no effect on the direction of INtRON Biotechnology i.e., INtRON Biotechnology and LG Household go up and down completely randomly.
Pair Corralation between INtRON Biotechnology and LG Household
Assuming the 90 days trading horizon INtRON Biotechnology is expected to generate 1.66 times less return on investment than LG Household. In addition to that, INtRON Biotechnology is 2.88 times more volatile than LG Household Healthcare. It trades about 0.01 of its total potential returns per unit of risk. LG Household Healthcare is currently generating about 0.05 per unit of volatility. If you would invest 13,850,000 in LG Household Healthcare on September 14, 2024 and sell it today you would earn a total of 200,000 from holding LG Household Healthcare or generate 1.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iNtRON Biotechnology vs. LG Household Healthcare
Performance |
| Timeline |
| iNtRON Biotechnology |
| LG Household Healthcare |
INtRON Biotechnology and LG Household Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INtRON Biotechnology and LG Household
The main advantage of trading using opposite INtRON Biotechnology and LG Household positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INtRON Biotechnology position performs unexpectedly, LG Household 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 Household will offset losses from the drop in LG Household's long position.| INtRON Biotechnology vs. Samsung Electronics Co | INtRON Biotechnology vs. Samsung Electronics Co | INtRON Biotechnology vs. SK Hynix | INtRON Biotechnology vs. SK Holdings Co |
| LG Household vs. LG Household Healthcare | LG Household vs. Amorepacific Corp | LG Household vs. Jayjun Co | LG Household vs. CKH Food Health |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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