Correlation Between LG Electronics and NEOWIZ HOLDINGS
Can any of the company-specific risk be diversified away by investing in both LG Electronics and NEOWIZ HOLDINGS 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 Electronics and NEOWIZ HOLDINGS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LG Electronics and NEOWIZ HOLDINGS, you can compare the effects of market volatilities on LG Electronics and NEOWIZ HOLDINGS 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 Electronics with a short position of NEOWIZ HOLDINGS. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Electronics and NEOWIZ HOLDINGS.
Diversification Opportunities for LG Electronics and NEOWIZ HOLDINGS
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 066570 and NEOWIZ is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding LG Electronics and NEOWIZ HOLDINGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEOWIZ HOLDINGS and LG Electronics 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 Electronics are associated (or correlated) with NEOWIZ HOLDINGS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEOWIZ HOLDINGS has no effect on the direction of LG Electronics i.e., LG Electronics and NEOWIZ HOLDINGS go up and down completely randomly.
Pair Corralation between LG Electronics and NEOWIZ HOLDINGS
Assuming the 90 days trading horizon LG Electronics is expected to generate 0.59 times more return on investment than NEOWIZ HOLDINGS. However, LG Electronics is 1.71 times less risky than NEOWIZ HOLDINGS. It trades about 0.01 of its potential returns per unit of risk. NEOWIZ HOLDINGS is currently generating about -0.17 per unit of risk. If you would invest 8,950,000 in LG Electronics on September 1, 2024 and sell it today you would earn a total of 20,000 from holding LG Electronics or generate 0.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
LG Electronics vs. NEOWIZ HOLDINGS
Performance |
| Timeline |
| LG Electronics |
| NEOWIZ HOLDINGS |
LG Electronics and NEOWIZ HOLDINGS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG Electronics and NEOWIZ HOLDINGS
The main advantage of trading using opposite LG Electronics and NEOWIZ HOLDINGS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Electronics position performs unexpectedly, NEOWIZ HOLDINGS 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 NEOWIZ HOLDINGS will offset losses from the drop in NEOWIZ HOLDINGS's long position.| LG Electronics vs. Hyundai Green Food | LG Electronics vs. Seoul Food Industrial | LG Electronics vs. Haitai Confectionery Foods | LG Electronics vs. LS Materials |
| NEOWIZ HOLDINGS vs. AfreecaTV Co | NEOWIZ HOLDINGS vs. Seegene | NEOWIZ HOLDINGS vs. SS TECH | NEOWIZ HOLDINGS vs. Busan Industrial 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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