Correlation Between LG Chem and Seoyon Topmetal
Can any of the company-specific risk be diversified away by investing in both LG Chem and Seoyon Topmetal 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 Chem and Seoyon Topmetal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LG Chem and Seoyon Topmetal Co, you can compare the effects of market volatilities on LG Chem and Seoyon Topmetal 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 Chem with a short position of Seoyon Topmetal. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Chem and Seoyon Topmetal.
Diversification Opportunities for LG Chem and Seoyon Topmetal
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 051915 and Seoyon is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding LG Chem and Seoyon Topmetal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seoyon Topmetal and LG Chem 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 Chem are associated (or correlated) with Seoyon Topmetal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seoyon Topmetal has no effect on the direction of LG Chem i.e., LG Chem and Seoyon Topmetal go up and down completely randomly.
Pair Corralation between LG Chem and Seoyon Topmetal
Assuming the 90 days trading horizon LG Chem is expected to under-perform the Seoyon Topmetal. In addition to that, LG Chem is 1.17 times more volatile than Seoyon Topmetal Co. It trades about -0.1 of its total potential returns per unit of risk. Seoyon Topmetal Co is currently generating about 0.1 per unit of volatility. If you would invest 363,500 in Seoyon Topmetal Co on August 28, 2024 and sell it today you would earn a total of 17,000 from holding Seoyon Topmetal Co or generate 4.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LG Chem vs. Seoyon Topmetal Co
Performance |
| Timeline |
| LG Chem |
| Seoyon Topmetal |
LG Chem and Seoyon Topmetal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG Chem and Seoyon Topmetal
The main advantage of trading using opposite LG Chem and Seoyon Topmetal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Chem position performs unexpectedly, Seoyon Topmetal 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 Seoyon Topmetal will offset losses from the drop in Seoyon Topmetal's long position.| LG Chem vs. BGF Retail Co | LG Chem vs. Daou Technology | LG Chem vs. Ilji Technology Co | LG Chem vs. iNtRON Biotechnology |
| Seoyon Topmetal vs. Busan Industrial Co | Seoyon Topmetal vs. Busan Ind | Seoyon Topmetal vs. Mirae Asset Daewoo | Seoyon Topmetal vs. UNISEM 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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