Correlation Between LG Chemicals and Ananti
Can any of the company-specific risk be diversified away by investing in both LG Chemicals and Ananti 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 Chemicals and Ananti into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LG Chemicals and Ananti Inc, you can compare the effects of market volatilities on LG Chemicals and Ananti 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 Chemicals with a short position of Ananti. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Chemicals and Ananti.
Diversification Opportunities for LG Chemicals and Ananti
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 051910 and Ananti is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding LG Chemicals and Ananti Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ananti Inc and LG Chemicals 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 Chemicals are associated (or correlated) with Ananti. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ananti Inc has no effect on the direction of LG Chemicals i.e., LG Chemicals and Ananti go up and down completely randomly.
Pair Corralation between LG Chemicals and Ananti
Assuming the 90 days trading horizon LG Chemicals is expected to under-perform the Ananti. But the stock apears to be less risky and, when comparing its historical volatility, LG Chemicals is 1.04 times less risky than Ananti. The stock trades about -0.07 of its potential returns per unit of risk. The Ananti Inc is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 783,000 in Ananti Inc on November 2, 2024 and sell it today you would lose (157,000) from holding Ananti Inc or give up 20.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LG Chemicals vs. Ananti Inc
Performance |
| Timeline |
| LG Chemicals |
| Ananti Inc |
LG Chemicals and Ananti Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG Chemicals and Ananti
The main advantage of trading using opposite LG Chemicals and Ananti positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Chemicals position performs unexpectedly, Ananti 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 Ananti will offset losses from the drop in Ananti's long position.| LG Chemicals vs. Neungyule Education | LG Chemicals vs. ECSTELECOM Co | LG Chemicals vs. Samsung Publishing Co | LG Chemicals vs. Korea Information Communications |
| Ananti vs. Dongwha Enterprise CoLtd | Ananti vs. InBody CoLtd | Ananti vs. Seegene | Ananti vs. Dongsin Engineering Construction |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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