Correlation Between LG Chemicals and Withuspharmaceutical
Can any of the company-specific risk be diversified away by investing in both LG Chemicals and Withuspharmaceutical 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 Withuspharmaceutical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LG Chemicals and Withuspharmaceutical CoLtd, you can compare the effects of market volatilities on LG Chemicals and Withuspharmaceutical 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 Withuspharmaceutical. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Chemicals and Withuspharmaceutical.
Diversification Opportunities for LG Chemicals and Withuspharmaceutical
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 051910 and Withuspharmaceutical is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding LG Chemicals and Withuspharmaceutical CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Withuspharmaceutical 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 Withuspharmaceutical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Withuspharmaceutical has no effect on the direction of LG Chemicals i.e., LG Chemicals and Withuspharmaceutical go up and down completely randomly.
Pair Corralation between LG Chemicals and Withuspharmaceutical
Assuming the 90 days trading horizon LG Chemicals is expected to under-perform the Withuspharmaceutical. But the stock apears to be less risky and, when comparing its historical volatility, LG Chemicals is 1.44 times less risky than Withuspharmaceutical. The stock trades about -0.06 of its potential returns per unit of risk. The Withuspharmaceutical CoLtd is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 788,911 in Withuspharmaceutical CoLtd on September 4, 2024 and sell it today you would lose (143,911) from holding Withuspharmaceutical CoLtd or give up 18.24% 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. Withuspharmaceutical CoLtd
Performance |
| Timeline |
| LG Chemicals |
| Withuspharmaceutical |
LG Chemicals and Withuspharmaceutical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG Chemicals and Withuspharmaceutical
The main advantage of trading using opposite LG Chemicals and Withuspharmaceutical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Chemicals position performs unexpectedly, Withuspharmaceutical 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 Withuspharmaceutical will offset losses from the drop in Withuspharmaceutical's long position.| LG Chemicals vs. POSCO Holdings | LG Chemicals vs. Hanwha Solutions | LG Chemicals vs. Lotte Chemical Corp | LG Chemicals vs. Hyundai Steel |
| Withuspharmaceutical vs. Neungyule Education | Withuspharmaceutical vs. Haitai Confectionery Foods | Withuspharmaceutical vs. Daehan Steel | Withuspharmaceutical vs. Hankook Steel 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |