Correlation Between LG Electronics and Aprogen Healthcare
Can any of the company-specific risk be diversified away by investing in both LG Electronics and Aprogen Healthcare 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 Aprogen Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LG Electronics and Aprogen Healthcare Games, you can compare the effects of market volatilities on LG Electronics and Aprogen Healthcare 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 Aprogen Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Electronics and Aprogen Healthcare.
Diversification Opportunities for LG Electronics and Aprogen Healthcare
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between 066570 and Aprogen is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding LG Electronics and Aprogen Healthcare Games in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aprogen Healthcare Games 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 Aprogen Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aprogen Healthcare Games has no effect on the direction of LG Electronics i.e., LG Electronics and Aprogen Healthcare go up and down completely randomly.
Pair Corralation between LG Electronics and Aprogen Healthcare
Assuming the 90 days trading horizon LG Electronics is expected to generate 0.57 times more return on investment than Aprogen Healthcare. However, LG Electronics is 1.76 times less risky than Aprogen Healthcare. It trades about -0.06 of its potential returns per unit of risk. Aprogen Healthcare Games is currently generating about -0.1 per unit of risk. If you would invest 8,540,000 in LG Electronics on November 6, 2024 and sell it today you would lose (120,000) from holding LG Electronics or give up 1.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LG Electronics vs. Aprogen Healthcare Games
Performance |
| Timeline |
| LG Electronics |
| Aprogen Healthcare Games |
LG Electronics and Aprogen Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG Electronics and Aprogen Healthcare
The main advantage of trading using opposite LG Electronics and Aprogen Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Electronics position performs unexpectedly, Aprogen Healthcare 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 Aprogen Healthcare will offset losses from the drop in Aprogen Healthcare's long position.| LG Electronics vs. Samsung Publishing Co | LG Electronics vs. Samyang Foods Co | LG Electronics vs. CJ Seafood Corp | LG Electronics vs. Lotte Non Life Insurance |
| Aprogen Healthcare vs. LAKE MATERIALS LTD | Aprogen Healthcare vs. Hyundai Engineering Plastics | Aprogen Healthcare vs. Duksan Hi Metal | Aprogen Healthcare vs. PI Advanced Materials |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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