Correlation Between LG Household and Kukdong Oil
Can any of the company-specific risk be diversified away by investing in both LG Household and Kukdong Oil 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 Household and Kukdong Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LG Household Healthcare and Kukdong Oil Chemicals, you can compare the effects of market volatilities on LG Household and Kukdong Oil 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 Household with a short position of Kukdong Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Household and Kukdong Oil.
Diversification Opportunities for LG Household and Kukdong Oil
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between 051900 and Kukdong is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding LG Household Healthcare and Kukdong Oil Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kukdong Oil Chemicals and LG Household 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 Household Healthcare are associated (or correlated) with Kukdong Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kukdong Oil Chemicals has no effect on the direction of LG Household i.e., LG Household and Kukdong Oil go up and down completely randomly.
Pair Corralation between LG Household and Kukdong Oil
Assuming the 90 days trading horizon LG Household Healthcare is expected to under-perform the Kukdong Oil. In addition to that, LG Household is 1.13 times more volatile than Kukdong Oil Chemicals. It trades about -0.4 of its total potential returns per unit of risk. Kukdong Oil Chemicals is currently generating about 0.21 per unit of volatility. If you would invest 339,516 in Kukdong Oil Chemicals on October 18, 2024 and sell it today you would earn a total of 10,984 from holding Kukdong Oil Chemicals or generate 3.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LG Household Healthcare vs. Kukdong Oil Chemicals
Performance |
| Timeline |
| LG Household Healthcare |
| Kukdong Oil Chemicals |
LG Household and Kukdong Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG Household and Kukdong Oil
The main advantage of trading using opposite LG Household and Kukdong Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Household position performs unexpectedly, Kukdong Oil 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 Kukdong Oil will offset losses from the drop in Kukdong Oil's long position.| LG Household vs. Sungdo Engineering Construction | LG Household vs. KTB Investment Securities | LG Household vs. Woori Technology Investment | LG Household vs. E Investment Development |
| Kukdong Oil vs. Husteel | Kukdong Oil vs. LG Household Healthcare | Kukdong Oil vs. LG Household Healthcare | Kukdong Oil vs. DRB Industrial Co |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |