Correlation Between Y Optics and LG Electronics
Can any of the company-specific risk be diversified away by investing in both Y Optics and LG Electronics 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 Y Optics and LG Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Y Optics Manufacture Co and LG Electronics Pfd, you can compare the effects of market volatilities on Y Optics and LG Electronics 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 Y Optics with a short position of LG Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Y Optics and LG Electronics.
Diversification Opportunities for Y Optics and LG Electronics
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 066430 and 066575 is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Y Optics Manufacture Co and LG Electronics Pfd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Electronics Pfd and Y Optics 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 Y Optics Manufacture Co are associated (or correlated) with LG Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LG Electronics Pfd has no effect on the direction of Y Optics i.e., Y Optics and LG Electronics go up and down completely randomly.
Pair Corralation between Y Optics and LG Electronics
Assuming the 90 days trading horizon Y Optics Manufacture Co is expected to under-perform the LG Electronics. In addition to that, Y Optics is 1.76 times more volatile than LG Electronics Pfd. It trades about -0.06 of its total potential returns per unit of risk. LG Electronics Pfd is currently generating about 0.0 per unit of volatility. If you would invest 4,487,797 in LG Electronics Pfd on September 4, 2024 and sell it today you would lose (247,797) from holding LG Electronics Pfd or give up 5.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Y Optics Manufacture Co vs. LG Electronics Pfd
Performance |
| Timeline |
| Y Optics Manufacture |
| LG Electronics Pfd |
Y Optics and LG Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Y Optics and LG Electronics
The main advantage of trading using opposite Y Optics and LG Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Y Optics position performs unexpectedly, LG Electronics 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 Electronics will offset losses from the drop in LG Electronics' long position.The idea behind Y Optics Manufacture Co and LG Electronics Pfd 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 Electronics vs. AptaBio Therapeutics | LG Electronics vs. Daewoo SBI SPAC | LG Electronics vs. Dream Security co | LG Electronics vs. Microfriend |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |