Correlation Between LG Chemicals and Jb Financial
Can any of the company-specific risk be diversified away by investing in both LG Chemicals and Jb Financial 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 Jb Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LG Chemicals and Jb Financial, you can compare the effects of market volatilities on LG Chemicals and Jb Financial 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 Jb Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Chemicals and Jb Financial.
Diversification Opportunities for LG Chemicals and Jb Financial
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between 051910 and 175330 is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding LG Chemicals and Jb Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jb Financial 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 Jb Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jb Financial has no effect on the direction of LG Chemicals i.e., LG Chemicals and Jb Financial go up and down completely randomly.
Pair Corralation between LG Chemicals and Jb Financial
Assuming the 90 days trading horizon LG Chemicals is expected to under-perform the Jb Financial. In addition to that, LG Chemicals is 1.32 times more volatile than Jb Financial. It trades about -0.06 of its total potential returns per unit of risk. Jb Financial is currently generating about 0.07 per unit of volatility. If you would invest 1,359,743 in Jb Financial on January 19, 2025 and sell it today you would earn a total of 383,257 from holding Jb Financial or generate 28.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LG Chemicals vs. Jb Financial
Performance |
| Timeline |
| LG Chemicals |
| Jb Financial |
LG Chemicals and Jb Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG Chemicals and Jb Financial
The main advantage of trading using opposite LG Chemicals and Jb Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Chemicals position performs unexpectedly, Jb Financial 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 Jb Financial will offset losses from the drop in Jb Financial's long position.| LG Chemicals vs. Koryo Credit Information | LG Chemicals vs. KB Financial Group | LG Chemicals vs. Pureun Mutual Savings | LG Chemicals vs. Samsung Life Insurance |
| Jb Financial vs. Samsung Electronics Co | Jb Financial vs. Samsung Electronics Co | Jb Financial vs. Hyundai Motor Co | Jb Financial vs. Hyundai Motor 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |