Correlation Between Wonbang Tech and LG Uplus
Can any of the company-specific risk be diversified away by investing in both Wonbang Tech and LG Uplus 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 Wonbang Tech and LG Uplus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wonbang Tech Co and LG Uplus, you can compare the effects of market volatilities on Wonbang Tech and LG Uplus 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 Wonbang Tech with a short position of LG Uplus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wonbang Tech and LG Uplus.
Diversification Opportunities for Wonbang Tech and LG Uplus
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Wonbang and 032640 is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Wonbang Tech Co and LG Uplus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Uplus and Wonbang Tech 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 Wonbang Tech Co are associated (or correlated) with LG Uplus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LG Uplus has no effect on the direction of Wonbang Tech i.e., Wonbang Tech and LG Uplus go up and down completely randomly.
Pair Corralation between Wonbang Tech and LG Uplus
Assuming the 90 days trading horizon Wonbang Tech Co is expected to generate 2.2 times more return on investment than LG Uplus. However, Wonbang Tech is 2.2 times more volatile than LG Uplus. It trades about 0.35 of its potential returns per unit of risk. LG Uplus is currently generating about -0.24 per unit of risk. If you would invest 1,248,000 in Wonbang Tech Co on November 2, 2024 and sell it today you would earn a total of 177,000 from holding Wonbang Tech Co or generate 14.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wonbang Tech Co vs. LG Uplus
Performance |
| Timeline |
| Wonbang Tech |
| LG Uplus |
Wonbang Tech and LG Uplus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wonbang Tech and LG Uplus
The main advantage of trading using opposite Wonbang Tech and LG Uplus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wonbang Tech position performs unexpectedly, LG Uplus 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 LG Uplus will offset losses from the drop in LG Uplus' long position.| Wonbang Tech vs. Korea Air Svc | Wonbang Tech vs. Korean Air Lines | Wonbang Tech vs. Dongil Metal Co | Wonbang Tech vs. Shinsegae Food |
| LG Uplus vs. Busan Industrial Co | LG Uplus vs. Busan Ind | LG Uplus vs. RPBio Inc | LG Uplus vs. Finebesteel |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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