Correlation Between LG Chemicals and Eagle Veterinary
Can any of the company-specific risk be diversified away by investing in both LG Chemicals and Eagle Veterinary 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 Eagle Veterinary into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LG Chemicals and Eagle Veterinary Technology, you can compare the effects of market volatilities on LG Chemicals and Eagle Veterinary 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 Eagle Veterinary. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Chemicals and Eagle Veterinary.
Diversification Opportunities for LG Chemicals and Eagle Veterinary
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 051910 and Eagle is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding LG Chemicals and Eagle Veterinary Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Veterinary Tec 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 Eagle Veterinary. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Veterinary Tec has no effect on the direction of LG Chemicals i.e., LG Chemicals and Eagle Veterinary go up and down completely randomly.
Pair Corralation between LG Chemicals and Eagle Veterinary
Assuming the 90 days trading horizon LG Chemicals is expected to under-perform the Eagle Veterinary. But the stock apears to be less risky and, when comparing its historical volatility, LG Chemicals is 1.06 times less risky than Eagle Veterinary. The stock trades about -0.05 of its potential returns per unit of risk. The Eagle Veterinary Technology is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 645,680 in Eagle Veterinary Technology on September 3, 2024 and sell it today you would lose (162,180) from holding Eagle Veterinary Technology or give up 25.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LG Chemicals vs. Eagle Veterinary Technology
Performance |
| Timeline |
| LG Chemicals |
| Eagle Veterinary Tec |
LG Chemicals and Eagle Veterinary Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG Chemicals and Eagle Veterinary
The main advantage of trading using opposite LG Chemicals and Eagle Veterinary positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Chemicals position performs unexpectedly, Eagle Veterinary 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 Eagle Veterinary will offset losses from the drop in Eagle Veterinary's long position.| LG Chemicals vs. Eagle Veterinary Technology | LG Chemicals vs. Daehan Synthetic Fiber | LG Chemicals vs. Chin Yang Chemical | LG Chemicals vs. Global Standard Technology |
| Eagle Veterinary vs. Kolon Life Science | Eagle Veterinary vs. JETEMA Co | Eagle Veterinary vs. Aminologics CoLtd | Eagle Veterinary vs. Daihan Pharmaceutical CoLtd |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |