Correlation Between AnterogenCoLtd and LG Uplus
Can any of the company-specific risk be diversified away by investing in both AnterogenCoLtd 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 AnterogenCoLtd and LG Uplus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AnterogenCoLtd and LG Uplus, you can compare the effects of market volatilities on AnterogenCoLtd 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 AnterogenCoLtd with a short position of LG Uplus. Check out your portfolio center. Please also check ongoing floating volatility patterns of AnterogenCoLtd and LG Uplus.
Diversification Opportunities for AnterogenCoLtd and LG Uplus
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AnterogenCoLtd and 032640 is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding AnterogenCoLtd and LG Uplus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Uplus and AnterogenCoLtd 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 AnterogenCoLtd 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 AnterogenCoLtd i.e., AnterogenCoLtd and LG Uplus go up and down completely randomly.
Pair Corralation between AnterogenCoLtd and LG Uplus
Assuming the 90 days trading horizon AnterogenCoLtd is expected to generate 2.25 times more return on investment than LG Uplus. However, AnterogenCoLtd is 2.25 times more volatile than LG Uplus. It trades about 0.13 of its potential returns per unit of risk. LG Uplus is currently generating about 0.16 per unit of risk. If you would invest 1,508,000 in AnterogenCoLtd on September 12, 2024 and sell it today you would earn a total of 159,000 from holding AnterogenCoLtd or generate 10.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AnterogenCoLtd vs. LG Uplus
Performance |
| Timeline |
| AnterogenCoLtd |
| LG Uplus |
AnterogenCoLtd and LG Uplus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AnterogenCoLtd and LG Uplus
The main advantage of trading using opposite AnterogenCoLtd and LG Uplus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AnterogenCoLtd 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.The idea behind AnterogenCoLtd and LG Uplus pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| LG Uplus vs. Kbi Metal Co | LG Uplus vs. Pungguk Ethanol Industrial | LG Uplus vs. DONGKUK TED METAL | LG Uplus vs. Hanjin Transportation 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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