Correlation Between LG Household and Chorokbaem Healthcare
Can any of the company-specific risk be diversified away by investing in both LG Household and Chorokbaem Healthcare 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 Chorokbaem Healthcare 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 Chorokbaem Healthcare Co, you can compare the effects of market volatilities on LG Household and Chorokbaem Healthcare 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 Chorokbaem Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Household and Chorokbaem Healthcare.
Diversification Opportunities for LG Household and Chorokbaem Healthcare
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between 051900 and Chorokbaem is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding LG Household Healthcare and Chorokbaem Healthcare Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chorokbaem Healthcare 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 Chorokbaem Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chorokbaem Healthcare has no effect on the direction of LG Household i.e., LG Household and Chorokbaem Healthcare go up and down completely randomly.
Pair Corralation between LG Household and Chorokbaem Healthcare
Assuming the 90 days trading horizon LG Household Healthcare is expected to generate 0.89 times more return on investment than Chorokbaem Healthcare. However, LG Household Healthcare is 1.13 times less risky than Chorokbaem Healthcare. It trades about 0.0 of its potential returns per unit of risk. Chorokbaem Healthcare Co is currently generating about -0.02 per unit of risk. If you would invest 31,400,000 in LG Household Healthcare on October 24, 2024 and sell it today you would lose (1,650,000) from holding LG Household Healthcare or give up 5.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LG Household Healthcare vs. Chorokbaem Healthcare Co
Performance |
| Timeline |
| LG Household Healthcare |
| Chorokbaem Healthcare |
LG Household and Chorokbaem Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG Household and Chorokbaem Healthcare
The main advantage of trading using opposite LG Household and Chorokbaem Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Household position performs unexpectedly, Chorokbaem Healthcare 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 Chorokbaem Healthcare will offset losses from the drop in Chorokbaem Healthcare's long position.| LG Household vs. Ssangyong Information Communication | LG Household vs. Mobile Appliance | LG Household vs. Automobile Pc | LG Household vs. Innowireless Co |
| Chorokbaem Healthcare vs. CKH Food Health | Chorokbaem Healthcare vs. Daelim Trading Co | Chorokbaem Healthcare vs. E Investment Development | Chorokbaem Healthcare vs. KTB Investment Securities |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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