Correlation Between LG Household and Alton Sports
Can any of the company-specific risk be diversified away by investing in both LG Household and Alton Sports 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 Alton Sports 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 Alton Sports CoLtd, you can compare the effects of market volatilities on LG Household and Alton Sports 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 Alton Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Household and Alton Sports.
Diversification Opportunities for LG Household and Alton Sports
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 051905 and Alton is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding LG Household Healthcare and Alton Sports CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alton Sports CoLtd 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 Alton Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alton Sports CoLtd has no effect on the direction of LG Household i.e., LG Household and Alton Sports go up and down completely randomly.
Pair Corralation between LG Household and Alton Sports
Assuming the 90 days trading horizon LG Household Healthcare is expected to under-perform the Alton Sports. In addition to that, LG Household is 1.18 times more volatile than Alton Sports CoLtd. It trades about -0.43 of its total potential returns per unit of risk. Alton Sports CoLtd is currently generating about 0.33 per unit of volatility. If you would invest 145,300 in Alton Sports CoLtd on November 7, 2024 and sell it today you would earn a total of 8,700 from holding Alton Sports CoLtd or generate 5.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
LG Household Healthcare vs. Alton Sports CoLtd
Performance |
| Timeline |
| LG Household Healthcare |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Alton Sports CoLtd |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
LG Household and Alton Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG Household and Alton Sports
The main advantage of trading using opposite LG Household and Alton Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Household position performs unexpectedly, Alton Sports 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 Alton Sports will offset losses from the drop in Alton Sports' long position.| LG Household vs. MediaZen | LG Household vs. Spolytech Co | LG Household vs. Yura Tech Co | LG Household vs. Ewon Comfortech Co |
| Alton Sports vs. Korea Plasma Technology | Alton Sports vs. Daou Technology | Alton Sports vs. Vina Technology Co | Alton Sports vs. Woori 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |